Nanaimo CFO spent thousands on personal expenses, then couldn’t repay

News Nanaimo lifts the lid on the months-long drama that has been unfolding in the city's finance department over CFO Victor Mema's credit card spending
Victor Mema
Victor Mema
Nanaimo chief financial officer Victor Mema spent thousands of dollars on personal vacations and other ineligible expenses on his city credit card, it has been claimed.

News Nanaimo has also learned that city manager Tracy Samra approved a loan to Mr. Mema from the city when he couldn’t repay the municipality for his personal spending.

He has been repaying the loan — believed to be interest free — in installments, reliable sources said. The most recently available figures show Mr. Mema was paid a $162,000 salary in 2016.

The use of city purchase cards for personal expenses is expressly prohibited by city policies and cardholder agreements, which say employees may be terminated if they do so.

Excusing Mr. Mema’s policy breaches and granting him a loan is what accountants call a “management override of internal controls” — overruling prescribed policies or procedures meant to protect the city from financial abuses.

Staff complaints ignored

When managers in the city’s finance department raised red flags about Mr. Mema’s breaches of the city’s policies their complaints were dismissed, it was alleged.

Complaints to the city’s auditors KPMG also went nowhere, it was claimed.

KPMG spokesperson Lisa Papas said the auditing firm was “unable to comment on our audit work due to professional standards relating to client confidentiality.”

Sources said that former deputy director of financial services Deborah Duncan, the city’s second most senior finance official, was pressed into early retirement after she blew the whistle on Mr. Mema’s troubling transactions. She left the city last October.

Ms. Duncan’s treatment left other managers fearful for their jobs and feeling they had nowhere to turn, sources said. Two managers in the department went on leave as a result of the anxiety and stress caused by the upheaval over Mr. Mema’s flouting of the rules. Union members in the department were also impacted.

Amid tensions between him and department staff, Mr. Mema brought in a former colleague from Alberta, Nick Mloyi, to “temporarily” fill Ms. Duncan’s post, elevating him above long-time managers.

He also hired a second staff member from the Regional Municipality of Wood Buffalo where he previously worked. That new employee has yet to start work.

Council finally told last Thursday

It is understood that city council was officially informed about Mr. Mema’s personal transactions and the problems in the city’s finance department at a closed meeting last Thursday.

This was done by one of the city’s managers on behalf of a union member.

According to sources, council suspended Mr. Mema, but in a statement the next day, council said only that it had launched an investigation after hearing an “allegation of significant concern.”

The city continues to block News Nanaimo’s freedom of information request to access Mr. Mema’s and Ms. Samra’s city credit card statements, which were refused even though the city furnished statements for three other senior managers.

That request, which is currently in mediation with BC’s Office of the Information and Privacy Commissioner (OIPC), was originally made on October 13 last year.

One source said Mr. Mema strongly advocated for the city to block the request and demanded that the city use its lawyers to fight it “under any and all circumstances.”

News Nanaimo is asking the OIPC to order the city to disclose the documents.

Allowed to keep card

Mr. Mema’s personal spending on the city’s credit card first became an issue early last year, sources said.

It is understood that he incurred expenses related to a personal vacation around the same time he is known to have attended a relative’s wedding.

However, when the city received the credit card bill Mr. Mema was unable to repay the personal expenses he had incurred. The issue was referred to the city’s HR department and Ms. Samra.

Tracy Samra
Tracy Samra

Ms. Samra arranged for Mr. Mema to pay off the personal expenses through regular payroll deductions. He was allowed to keep his city purchasing card.

At the time, Mr. Mema was an important member of the team working on council majority leader Bill Bestwick’s plan to build a $100-million hockey arena on Nanaimo’s waterfront. It is unclear if any council members were aware of Mr. Mema’s purchasing card problems.

Subsequent management expense reports made public on the city’s website failed to show that Mr. Mema had incurred the personal expenses and was paying back the money.

Flights to Mexico

After receiving information last September News Nanaimo began requesting records of Mr. Mema’s and Ms. Samra’s expenses, including receipts.

Later that same month, media reported that Mr. Mema’s previous employer, the District of Sechelt, was suing him in small claims court for almost $10,000 in allegedly personal expenses he had incurred on a district credit card. He has not formally replied to the allegations in court.

It was after this that Ms. Samra reviewed Mr. Mema’s credit card spending for any new personal charges.

She allegedly found that two personal air tickets to Mexico had been billed to his purchase card earlier that month. There was also a personal vehicle repair bill charged to the card, sources said.

In comments to the media after the Sechelt lawsuit was made known, Ms. Samra defended Mr. Mema saying he had “demonstrated outstanding leadership throughout his tenure at the City of Nanaimo and we are proud that he continues to serve as our chief financial officer.”

Meanwhile, News Nanaimo requested copies of Mr. Mema’s and Ms. Samra’s credit card statements and published a widely-read article based on expense receipts received from the city.

After publishing an article on Dec. 3 saying the city was refusing access to Ms. Samra and Mr. Mema’s credit card statements, Ms. Samra announced that the city was reviewing its expense policies with council’s support.

Whitewash report

A Dec. 8 release about the review said that Mr. Mema had “moved to make council and city staff expense reporting more transparent” and that “allegations that city staff have overspent or charged taxpayers for non-eligible expenses are unfounded.”

However, as part of the review and instead of directly investigating Mr. Mema’s spending, Ms. Samra ordered the city’s auditors KPMG to review the expenses of former senior managers going back more than 10 years.

Said a source of KPMG’s review: “The idea was to find examples of personal expenses by past managers to whitewash the current personal expenses. She [Ms. Samra] wanted to show it wasn’t unusual.”

It’s understood that Mr. Mema’s credit card was revoked and Ms. Samra also turned in her card during KPMG’s review.

Sources say council has now been provided with a copy of the 10-year review, but it doesn’t find any egregious examples of personal spending by former managers. Violations were mostly where personal expenses and business expenses couldn’t be separated. All were repaid immediately.

News release to “take heat off”

Ms. Samra was arrested late on the evening of Jan. 31 on allegations of uttering threats during an incident earlier in the day at City Hall. She has not been formally charged.

Three days later, on Saturday Feb. 03, a news release was published on the city’s website announcing that the review of staff expenses policies was complete. It is unusual for the city to issue news releases on Saturdays.

Acknowledging for the first time that KPMG had been tasked to conduct a review, the release claimed that for more than a decade the city had “in practice” allowed personal expenses on city purchase cards and credit cards and there “has been no defalcation, fraud or misappropriation of city funds.”

Issuing the news release was approved by council, but one source said councillor Gord Fuller wanted it issued to “take the heat off of Victor Mema” caused by News Nanaimo’s continuing coverage.

Mr. Fuller declined comment when asked about this yesterday.

However, city staff removed the news release later in the day Saturday saying it had been issued prematurely due to a glitch in the city’s web publishing software. However, later that night after 11:00pm it was posted again, this time at the behest of Mr. Mema, a source claimed.

This week, however, the release was removed from the city’s website. There has been no official word on why it was taken down, but it is understood that city staff believe it is misleading.

Mr. Mema declined all comment to News Nanaimo yesterday.


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    • Yes, that’s the usual thing until a formal investigation determines they’ve done something wrong.

      • When is this formal investigation to take place? The two in question are being rewarded, in fact, by not having to go to work and yet collect full big salaries. i thought justice is to be swift!? If further disciplinary action is to take place, who is the person or persons to make the decision and carry it out? it should not be a Council decision as both culprits have their supporters on Council.

  • I hope the “Fab Five” are happy with their hiring record. I am laughing aloud, because I moved out of Nanaimo for these reasons. As one lady put it when interviewed for the local newspaper before the last election, “There is so much wrong with Nanaimo that voting won’t help”. It is a self-fulfilling prophecy, and I ground my teeth when I read it, but she was right. So here is one ex-Nanaimo resident who is happy to laugh out loud at these revelations of criminal activity. The joke is on Bestwick, Kipp and Fuller et al. Good Luck getting rid of the trash on council, folks. It might not be as easy as you think.

    No wonder the RDN director wants name change. Who wouldn’t?

    • Charles Thirkell – Our community is so much more than this. Hope the door didn’t hit you on the way out. Despite this mess we live in a great city with great people. I hope the friends you made while here read this as this is a very shallow assessment of the City on your part. There are a thousand great stories about life here for every crappy City Hall story.

      • I lived and worked int he city of Nanaimo for over 20 years, protecting streams and wildlife habitat, only to watch as the community cut off the water to the most productive stream in the city. The same groundswell put the Fab Five in office, and it is not ending well at all. Anyone who is “in the know” has to either laugh or cry at what has happened in the last five years. Nanaimo is a disgrace to the rest of the island. The last good mayor was Gary Korpan. After him, the city went into a tailspin. Sadly, Gary was accused of “Korruption” and he was voted out of office. The level of real corruption that has happened under the suspended manager and CFO warrants charges, with or without the death threats. Yes, there are thousands of good people in Nanaimo. So where were they on the last election day?

  • Wow! There’s a Bank of Nanaimo? Who knew? But since I can’t head on down to city hall, open an account there and get an interest-free loan like Vic, I will have to silently fume about how senior bureaucrats were so egregiously abusing the trust we placed in them to handle our tax money. Let us not forget either about how certain elements on council, who may not have known the details of such abuses, still enabled this dysfunctional behaviour that now must be investigated to find out if any illegalities were committed.

  • Where are those 10 taxpayers who wanted to sue the Mayor now? Probably waiting for instructions to appear on someone’s windshield. I wonder if Bestwick’s paygrade is high enough to understand what theft and conspiracy are? Is it not illegal for the City to give loans to anyone? Some days I think I have gone to sleep and woken up in a mafia movie. I better make sure my house insurance is all paid up.

  • Now let’s see Mr. Mema –

    Certified Professional Accountant in Alberta not BC.
    Chief Financial Officer city of Nanaimo
    $162,000 per year salary.
    Doesn’t know how to repay the money that he may
    have embezzled from the citizens of Nanaimo.
    Being sued by Sechelt.

    Sir, you appear to be putting together a very unique resume.

    I’m wondering how you would handle a 5 year old’s piggy bank.

    Perhaps he didn’t apply for registration in BC because of the law suit,
    expecting he would be denied.

  • I wouldn’t be surprised nor would I be against a YuuuuuGE (as Gord F says) lawsuit being launched against the City by a whole bunch of former employees for millions and millions of dollars being compensation for wrongful effective dismissal, etc etc caused by this Council and the two senior managers who apparently made it a sheer living hell of a place to work in. Keep dragging your feet and making silly press releases Council. Keep making your little stupid rhetorical and meaningless speech at the beginning of each council meeting Mckay all as concocted by Samra and Bestwick and Co in order to intimidate everyone from speaking their minds.

  • And, outside of Newsnanaimo, where has been the reporting on this? Oh ya, the same news company that’s failed to uncover or report on any of this Samra/Mema scandal closed the daily newspaper that could not do much better, since it was cut to the bone and had a series of publishers and managers that only saw news stories as wrap-arounds for ads. Minimal and poorly paid staff at Black Press wouldn’t know this was a story unless the cops told them in a news release. We all need to be grateful to Newsnanaimo since if it were not asking hard questions this crew would likely have got away with this. And that’s what they were relying on, no accountability since the daily newspaper was shuttered and all that remained was weakly paper that couldn’t cover a scandal like this even if it wanted to. Hey, unless we can find a way to fix journalism, this is the sad future of democracy.

      • i fully agree.. kudos to dominic here and all along for throwing a light on what is happening at city council.. thank you dominic! it is wonderful you live in this fantastic city nanaimo… thankfully charles is happily somewhere else too!

      • Thanks. Charles has contributed to Nanaimo and still cares. We should work to win him back 🙂

  • From the outside it strikes me that a complete and professional review of hiring practices is required. Did no one check references? Review past employment? That is, the usual steps taken before hiring in the real world.

  • Every adult Nanaimo resident can have a say on a city hiring process review later this year. Vote!
    First, fire most of the current council — Bestwick, Fuller and Kipp for sure — and elect candidates who demonstrate integrity and moral fibre, and who will implement the necessary reviews and processes with a dual purpose: to get city staffing back on track with best practices, and then to uncover who schemed and abused the system to put underqualified and questionable hires in the city’s top positions.
    For the sake of transparency we need to know who, on council and off, was involved in this failed palace coup.
    But first Nanaimoites must vote in large numbers for a slate of solid candidates. Otherwise we’ll just get the same all over again. It’s up to us.

  • This is disgusting, this man steals from the city while people are living on the street? On top of a 162 thousand dollar salary? No wonder our city is going to shit. There are continued cutbacks in programs we need, while we just ignore the fact that the elderly and homeless are living on the street. I no first hand as a friend is letting a 63 yr old homeless lady with her cats stay in her woodshed. So sad that she cant get housing or even a warm bed.

  • Swine at the trough. Sad for swine to be thought of this way. The 5, Samra and Mema have got to go. Concil wastes too much money handringing about this stuff. Get rid of these people.

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