Mystery surrounds massive U of R legal bills

Huge legal bills were a major reason for significant overspending discovered in the U of R's faculty of engineering.

CBC News has learned the faculty overspent by $1.3 million over a period of several years.

Between May 2010 and December 2011, more than $500,000 flowed from the faculty of engineering's accounts, through the University Industry Liaison Office (UILO), to law firms specializing in intellectual property.

The university insists that no policies were breached in the spending of this money.

In an email to CBC News, it explains that the half-million dollars in legal fees was "for patent and intellectual property work associated with petroleum engineering research."

However, there are still questions that remain about the overspending and when it took place.

Engineering and UILO connections

In early 2010, there was a close business relationship between the dean of the faculty of engineering, Paitoon Tontiwachwuthikul, and the director of the UILO, Ian Bailey.

They had formed a for-profit corporation called Gen Five in which Bailey was the president and Tontiwachwuthikul was the vice-president.

In early 2010, the two men authored the "Gen Five Funding Proposal", which was seeking $7.75 million in research money from two private companies, Regina-based HTC PureEnergy and Doosan, based in South Korea.

In the summer of that year the university's new vice president of research, Rod Kelln, discovered the existence of the company and its negotiations and he asked another university employee, Bob Schad, to investigate.

One of the curious matters that came to Schad's attention, according to an internal university report obtained by CBC, was significant legal fees being billed to Bailey and the UILO in these mysterious negotiations.

"I inquired as to the costs of the lawyer and who the lawyer representing the university is," Schad wrote, "and where the costs are being charged to."

Schad also questioned why the legal work wasn't being done internally at the university.

The answers to Schad's questions are not detailed in the report.

University legal bills and carbon capture fight

Some details, however, have come to light in recent court documents.

The university is suing HTC and Doosan in a dispute alleging the misappropriation of the university's carbon capture technology.

In HTC's statement of defence, it identifies a Vancouver-based lawyer from Gowlings, Robert, Fashler as the university's legal counsel..

According to that court filing, Fashler began representing Bailey on behalf of the university in May 2010, the same month that the UILO began amassing legal bills on behalf of the faculty of engineering.

CBC News asked the university how it was possible that Bailey and the UILO could have spent a half-million dollars on legal fees and how it went undetected for so long.

"Research cash flows are by their nature unpredictable," says a written statement from the U of R. "At the University's request, the Provincial Auditor is reviewing this and other files to confirm the appropriateness of our protocols and monitoring."

The chair of the University of Regina Faculty Association, Gary Tompkins, says this whole issue is troubling.

"I think it's incumbent on the administration to explain themselves here and to get the confidence of the faculty that the money the administration has is being managed in a proper way," Tompkins said. "It's looking like there's some very slack managing going on."