OTTAWA — Clifton Wenzel, a decorated Second World War bomber pilot, has won his first victory in his 44-year long fight to earn a military pension.

"I still can't really believe it, it was so long, I keep thinking what would I have to apply for next," Wenzel told CTV News.

Yves Cote, the ombudsman for the Department of Defence and the Canadian Forces, said in a report released Tuesday that Wenzel, now 83, ought to receive some compensation from the federal government.

"I come to the conclusion that Mr. Wenzel was not treated fairly when he left the regular force," Cote said at a news conference on Tuesday.

"In the spirit of fairness that is at the very heart of our mandate, I recommend that the damages he suffered be repaired with dignity and honour, that the injustice be acknowledged and that appropriate compensation be paid to Mr. Wenzel," he said.

If the government agrees to compensate Wenzel, he could receive a lump sum payment of as much as $800,000.

Defence Minister Bill Graham, who asked Cote to investigate Wenzel's case, apologized for for Wenzel's ill treatment and promised to consider the ombudsman's recommendations. But Graham said he would have to present the recommendations to his cabinet colleagues for their approval before he could authorize any settlement.

"I want to make it very clear to Mr. Wenzel, of course, we regret what took place in the past and I'd like to move forward and see how we can make sure he is properly treated and fairly treated in light of the Ombudsman's report," Graham said in an interview at his Toronto riding office.

Cote's recommendations include the following:

• The military should apologize for its unfair treatment of Wenzel.
• The military should retain an independent actuarial firm to calculate the compensation Wenzel is owed.
• Wenzel should be compensated for money he spent on legal help over the last three years.

Wenzel signed on with the forces at the age of 17 in Medicine Hat, Alta. As a soldier, he hated all the marching so he signed on with Air Force, eventually qualifying as a bomber pilot. He flew 47 combat missions during the Second World War, 400 sorties in the Berlin blockade after the war and serving in the Korean conflict. He was decorated with the Distinguished Flying Cross and the Air Force Cross.

But in 1961, at the age of 39, Wenzel wanted to retire from the service and begin a career in the private sector. He told military officials at the time that he had a young family and that he felt he would be better able to provide for them as a civilian than on his $800 a month air force salary.

So Wenzel wrote to the appropriate authorities asking for permission to retire early and for a partial pension based on his 20-odd years of service.

Under the rules at the time, an officer who had not reached the compulsory retirement age of 45 and who had more than 10 years of regular service but less than 25 years of service was entitled only to a return of his or her contributions and would not receive a pension.

There was, however, a loophole in those rules that gave the federal government some discretion to award annuities to officers who had not yet completed 25 years of service.

Based on Cote's investigation, it seemed that the magic number for getting a reduced pension under the discretionary rules seemed to be 20 years.

However, there was an error in the calculation of Wenzel's pensionable service that gave the impression he had served less than 20 years.

"I was utterly convinced I'd been screwed. I saw so many cases of people who were getting pensions with a lot of less service and a lot less time, and they were getting pensions because of some protocol," Wenzel said.

"The correct calculation would have put him in the 20-year plus category and our research revealed that this could have greatly enhanced his chance of getting a reduced pension," Cote said in a statement.

Government officials also had to consider if the requested retirement was "in the public interest" in order to grant an annuity.

In his 1961 letter requesting retirement, Wenzel argued that retiring early would make way for the promotion of younger officers and that, as a result, his retirement would indeed be "in the public interest."

Wenzel's request for a pension -- he was hoping for about $150 a month -- was denied. Instead, he was refunded all the contributions he made -- a little less than $5,000 -- with no interest.

Wenzel went on to a long and successful career as an airline industry executive. He worked for a time with Sir Freddie Laker, the British enterpreneur who started up SkyTrain, the first-ever no-frills airline. Wenzel also started up his own airline. He also ran some other businesses.

But his failure to receive a pension "kept gnawing at my craw all the time," he said. "I'd been diddled and I was very unhappy about it."

So he repeated his pension request over the years higher and higher up the military chain of command -- eventually taking his case to the Federal Court of Canada in 2002 -- but he never found the pension he was seeking.

But earlier this year, Graham asked the military ombudsman to look into Wenzel's case.

Cote found that Wenzel had not been treated fairly since 1961 and that Wenzel's department records were often inaccurate and incomplete.

Department officials would have used those records to justify their denial of Wenzel's pension request.

"The system failed Mr. Wenzel. Indeed, my office has established that a number of significant mistakes were made in the handling of his file," Cote said on Tuesday.

Cote said Wenzel was kept in the dark about the manner in which the "public interest" legislation was applied and interpreted.

"This greatly weakened his case and, as a result, he was turned down for a pension. The withholding of such crucial information was unfair to Mr. Wenzel," Cote said in a statement.