The Chair (Hon. Shawn Murphy (Charlottetown, Lib.)):
I'd like to call the meeting to order and ask the cameras to leave the room, please.
Thank you very much.
I want first of all to extend to everyone here a very warm welcome.
Colleagues, witnesses, members of the interested public, this is a meeting of the Standing Committee on Public Accounts. It's a continuation of chapter 9, “Pension and Insurance Administration—Royal Canadian Mounted Police”, all pursuant to the November 2006 Report of the Auditor General of Canada.
We're very pleased today to have six witnesses with us. First of all, we have Greg McEvoy, associate partner with the accounting firm of KPMG, who did the forensic audit into certain aspects. Mr. McEvoy, welcome to the committee.
From the Department of Public Works and Government Services Canada, we have the deputy minister and accounting officer, Mr. David Marshall, and the chief risk officer, Shahid Minto. Of course a lot of us know Mr. Minto was previously with the Office of the Auditor General. Welcome back to the committee, Mr. Minto.
As individuals, we have Dominic Crupi, who's been before the committee before; Mr. Frank Brazeau, who's formally associated with Consulting and Audit Canada; and Mr. David Smith, from the firm Abotech Inc. Welcome to all of you.
I understand that we have four individuals with opening remarks.
It's been the practice of the committee in this particular hearing to swear in the witnesses, so I am going to swear in all six individuals.
We found, Mr. Wrzesnewskyj, nine is more witnesses than this meeting can really handle. We felt, first of all, that Mr. Macaulay and Mr. Frizzell really had nothing to do with the subject matter that we're talking about this afternoon, although I understand they're in the audience.
Mr. Gauvin is also in the audience, I understand, but, again, we're leaving the table to the six. Again, if there are any relevant questions to Mr. Gauvin, we could invite him up, but we prefer to keep our questions, if possible, to the six witnesses.
We certainly don't see Mr. Frizzell or Mr. Macaulay having anything to do with this hearing.
We'll proceed with swearing in of the witnesses.
Mr. Greg McEvoy:
Good afternoon, Mr. Chair and committee members. Thank you for inviting me here today.
My name is Greg McEvoy. I'm an associate partner with KPMG in the forensic group. I am a chartered accountant, and have worked as a forensic accountant for approximately 16 years. I am designated as a specialist in forensic and investigative accounting by the Canadian Institute of Chartered Accountants. A significant portion of my experience has involved working with the federal government.
In late October 2004, KPMG was called by Consulting and Audit Canada and asked to review and investigate the procurement activity that CAC had conducted on behalf of the RCMP National Compensation Policy Centre, or NCPC.
I was the project manager leading this work, and significantly involved in the file. Initially KPMG was asked to review 31 contracts that CAC managed on behalf of the NCPC, and 30 of these contracts had been managed by a specific project manager, Mr. Frank Brazeau. Our file review of these 31 contracts took place from October to December of 2004. We identified serious concerns in the manner in which these contracts were procured. Due to our initial findings with respect to these contracts, a decision was made to review an additional 14 contracts, 13 of which were awarded to a company called Abotech Inc., which we understood to be owned and managed by Mr. David Smith.
Based on KPMG's review of these 45 contracts and related information, it is our view that the processes for managing and administering these contracts, when considered in their entirety, did not meet Treasury Board policy. The contracting was not conducted in a manner that would stand the test of public scrutiny in matters of prudence and probity. It did not facilitate access or encourage competition; quite the contrary. It did not reflect fairness in the spending of public funds. In particular, we found evidence of a process to facilitate contracts to desired resources, contract splitting, and contract backdating involving the creation of contracts for work that had already been performed.
In the case of Abotech, we found evidence of a pattern of referrals from Mr. Brazeau to Abotech, and also evidence of a process to facilitate contracts through Abotech to a resource desired by a given client.
We attempted to interview Mr. Brazeau during this timeframe, as his explanations and perspectives were obviously key to gaining a full understanding of his actions. However, he elected not be interviewed on the advice of his legal and union advisers. His response to KPMG is included on page 4 of the executive summary of our report.
Thank you for the opportunity to speak. I will be pleased to answer any questions you may have.
Mr. David Marshall:
Thank you, Mr. Chair.
I'm pleased to have an opportunity to outline for members of this committee as briefly as possible the actions of Public Works and Government Services Canada as they relate to the matter before you today. Our chief risk officer, Mr. Shahid Minto, accompanies me.
Consulting and Audit Canada is a special operating agency operating within Public Works and Government Services Canada. Its services are available only to federal government organizations and, on request, to other public sector and international organizations.
CAC provides a full set of government-oriented consulting and auditing services to the public sector. It may augment its in-house resources with private sector consultants to the benefit of its clients. It has also provided procurement services by contracting for external resources for the benefit of its clients. I believe it is this contracting service that is of interest to the committee at this time, and I will address it in more detail.
Shortly after my appointment in the summer of 2003, the Auditor General issued a report on the Privacy Commissioner Radwanski situation in September of 2003. In that report CAC was cited for having inappropriately placed some resources under contract for the Office of the Privacy Commissioner. As well, I was concerned that CAC was conducting auditing, consulting, and contracting services in the same organization, and I wanted to better understand if there was sufficient segregation of these functions in line with emerging trends in the auditing and consulting professions.
As a result, I asked that CAC conduct a thorough internal review of their contracting practices, as well as a review of their mandate and practices relating to segregation of duties. The internal review started in June 2004 and began to show some disturbing signs that the contracting work done by CAC on behalf of other departments had serious flaws. The chief auditor of CAC verbally shared this with me in September. At the same time he advised me that some of the contracts he had independently selected for audit and that he was concerned about, contracts relating to the RCMP pension fund and managed by a particular CAC employee, were also being investigated by the RCMP themselves.
This led to our retaining the services of KPMG forensic audit to dig into the matter more deeply. As well, I asked our chief risk officer to take over the mandate review. Initially KPMG was asked, as you heard, to look into 31 contracts put in place by a particular employee for the NCPC; it's actually 30 contracts, and one other by another employee.
As the findings of this work started to emerge, we asked KPMG to explore whether the same contractors who were engaged in the NCPC were also being sent to other clients. This resulted in a further 14 contracts being reviewed, 13 of which were with Abotech. Internally we referred to the investigation report of these 45 contracts as the KPMG 1 report. I believe the committee has obtained the KPMG report on this investigation.
The findings were of sufficient concern to me that I asked KPMG to widen its scope and to conduct a series of further investigations. First they looked at all high-risk contracts managed by this particular employee over the three-year period 2002-2005. We called this report KPMG 2. The findings confirmed, and provided further evidence of, poor practices followed by this employee.
Next, since this employee alleged that he was only following normal accepted practices at CAC, I asked KPMG to look at all high-risk contracts managed by all CAC employees for all clients during the period. We call this report KPMG 3. The conclusion was that while there was evidence of poor practices, they were not as serious or as widespread as those found relative to the particular employee.
Finally, I asked KPMG to do a review of what actions management had taken over the three-year period to exercise control over the operation and to ensure good practices were followed. That was KPMG 4. The findings were that management had indeed taken several actions, and that improvements in control had occurred over the three-year period; however, for a variety of reasons, they were not as effective as they should have been.
Mr. Chairman, we took several actions as a result of this series of findings. First of all, the employee in question was terminated. The contracting authority for Consulting and Audit Canada was removed at an early stage in these investigations.
The KPMG reports and files were referred to the RCMP. The Abotech file was also referred to the Ethics Commissioner. Consulting and Audit Canada was restructured to separate consulting from auditing. Key management staff received sanctions. Contracting staff at CAC were reprimanded and received additional training and supervision as required. The Office of the Auditor General, the Privy Council Office, and the Treasury Board Secretariat were kept fully informed through the process.
The RCMP has advised us that there is no evidence of fraud. As well, additional investigation by Public Works' own fraud investigations directorate of the records of Abotech and other contractors involved in this file found that records were properly kept and work appears to have been done as contracted for.
As you are aware, CAC has charged the RCMP some $666,000 for work conducted in obtaining and administering contracts on behalf of the NCPC. We have already refunded $200,000 of this fee to the RCMP in light of the poor practices of one of our employees. We are currently in discussion with the RCMP on how the responsibility for what happened in connection with the improper contracting practices should be shared, and we expect to resolve this matter very shortly.
I will be happy to answer questions.
Mr. Dominic Crupi:
Yes, very short. Thank you.
Once again, I would like to thank the committee for this opportunity to speak.
I became the director of NCPC in February 2001 on an acting basis and in September 2001 on a full-time basis with a mandate to implement the pension modernization. During this time, I gave regular updates, communiqués, and briefings to senior management at the RCMP and updated the necessary approvals from Treasury Board. I did not ever knowingly or purposely bypass or circumvent or advise anyone to bypass any processes or approvals, nor did I threaten any individual with losing their job.
I've already stated that I am not a procurement expert, so I hired someone to perform those duties. I requested help from RCMP contracting. They subsequently told us they could not accommodate our request, as they were too busy, and to go to Public Works. Public Works also told us that they could not accommodate us within the timeframes. We were then made aware of Consulting and Audit Canada, who, we were told, were a viable and legal entity to accommodate our procurement needs. I informed both Jim Ewanovich and Paul Gauvin. In fact, Mr. Gauvin indicated that it was an acceptable risk, as the costs would be significantly higher if the project were delayed for one year, because we were contractually obligated to start paying the outsourcer in May 2003.
At no time was there any collusion on my part with CAC or individuals from CAC.
Thank you. I'll answer any questions.
Mr. David Smith:
Good afternoon, Mr. Chairman.
I am here today in the interest of transparency and because of the willingness I have always shown since the time I first entered politics. I am surprised at having been invited.
Abotech was an SSE, that is, a small small enterprise, which placed consultants. When the company placed a consultant, it received a commission of between 5% to 10% on the contract margin. As for placement contracts with the RCMP, Abotech received two of them for a total value of $16,000 before taxes with a gross profit of 7%.
There seems to have been a problem with regard to the RCMP pension fund, but that was not the fault of Abotech. I encourage the people sitting at this table, as well as authorities, to get to the bottom of the matter. Abotech is not the problem. Abotech is an SSE which placed consultants in accordance with the framework in place at the time.
Mr. Chairman, last Friday I was told that there would be a meeting today. I was told that people were looking for me. A third party informed me that people were looking for me. My address hasn't changed, I still live in the same place, and my name is still in the phone book. I don't have anything to hide; I have always been very transparent. It is important to point that out.
I never read the report which is being discussed today and I never authorized its disclosure. What is said in the report is the interpretation of a third person. That interpretation came following a conversation we had, him and I, but I cannot tell you whether it reflects what I said because unfortunately I have not read the report.
I would be pleased to answer your questions. Thank you.
Mr. David Smith:
The process was very simple. I received a phone call from an individual, a former public servant who had some expertise. He told me that it was possible to get a contract through Consulting and Audit Canada. He wanted to know whether I would be interested in submitting his name for the contract in question.
I then fed his resume into the data base of Consulting and Audit Canada. A week or two later, I usually received, as did four or five other companies, an invitation to tender the names of potential candidates. So I presented the candidacy of the person through the call for tenders process. The call for tenders was put out by either Ms. Gour or Ms. Copping.
I put in my tender and was then advised by one of the two above-mentioned people whether or not I had gotten the contract. In a situation where the consultant asked for $500 a day, for instance, I added a margin of between 7% and 10% to cover administrative costs. The consultant earned $500, and I received $35 a day. That's how it worked. In the National Capital Region, hundreds of companies operate this way. The only difference is that they add on between 15% and 25%.
Mr. Dominic Crupi:
I never ordered contracts; procurement would do that. The process was set up, and that was the process I advised my person, who was the procurement officer, to follow. My person followed that process, got the required signatures, and it would flow through for final authorization by Mr. Ewanovich, as the person who was authorized to sign at the end. So I didn't do that kind of process.
I think there was a glitch when CAC came in. Because it was government to government, I was advised by one of my people that I could sign an MOU. We signed an MOU, but on the MOU there would also be signatures of financial authorities. I believe there were six signatures. I can't remember exactly whose they were. I don't have the MOU.
And it would process through a normal procedure. Finance would have been advised, because we would have set up an accounting process whereby money would come out of it when it was charged by CAC, for example, if we set them up as an agent that could charge.
Procurement then came to us and said their signature would be required. But we always used that sign-off process, the A5 sign-off process, which was all the people who could sign. But once procurement said they had to do it, we apologized. We didn't know that was the process. Procurement never told us that was the process.
So we changed the process. They redid the memoranda of understanding. And their signatures were on all of them.
Mr. David Christopherson (Hamilton Centre, NDP):
Thank you very much, Chair.
Thank you all for your attendance today.
Mr. McEvoy, on page 3 of the document, the auditor review, it states under 1.3, the second and third sentences:
||In the case of Abotech, there is evidence of a pattern of referrals from Mr. Brazeau to Abotech whereby consultants would be directed to Abotech by Mr. Brazeau. In a number of cases, Abotech received sole source contracts from CAC and in a number of other cases Abotech is the only bidder in a competitive procurement process.
In the next paragraph, which is a stand-alone sentence,
||Similar to the pattern noted above, there is also evidence of a process to facilitate contracts (through Abotech) to a resource desired by a given client.
Mr. Smith has given testimony that would have us believe that it was just fairly straightforward business. You heard the testimony.
These are pretty strong allegations with no caveats in here. What I really want is, in your own language, for you to explain what you mean by these patterns. Exactly what do you believe was going on that shouldn't have been? Could you be as clear as possible so that we can follow the bouncing ball here?
Mr. David Marshall:
You begin with the notion that in this case, in the NCPC you had an officer—I believe it was Mr. Crupi—whose own organization wouldn't put through the contract he wanted put through. That's the first thing.
Why was that? It was because they didn't agree that these were legitimate contracts. The people working had run out of options for legal contracting according to the Treasury Board rules, so they said to him no, we can't do this for you. He came to Public Works, our main contracting function, and our staff told him they weren't prepared to simply issue contracts to the people he wanted, that it had to be a competitive process. He then ran out of that option and was told—I don't know by whom—that there's this organization in Consulting and Audit Canada where, if you have problems of this kind, they'll facilitate the process for you.
He gets hold of Mr. Brazeau, who then by some means or the other, in the sense of however the various RFPs were run or bids evaluated, magically ends up with the very names that were required by the client.
In my books, that's just rigged, and it's not allowed. I don't care who says whether they—You've just heard Mr. Brazeau say he never put any contracts through, or something to that effect. Yes, it's true there was a contract processing unit within Consulting and Audit Canada, but the manager who referred these things to be put into contracts was Mr. Brazeau, so he was the individual who managed the process of facilitating these contracts. That's how I see it.
The acceptable risk was going to CAC when his procurement officials said they were too busy—I don't know the other statement that was made—to continue providing contracting services to us and to go to Public Works, who said they couldn't meet the timeframes. The acceptable risk was we had a contract with Morneau Sobeco, which was to start in March 2003, which would immediately have payments start to go to Morneau Sobeco. If we did not have the work in place, if we did not have the clean-ups of data and whatever in place, we would have had to pay Morneau Sobeco in the millions of dollars for not doing any work. The acceptable risk Mr. Gauvin identified was the additional cost—and I keep hearing it was 15%.
The way it was described to me—and I could be wrong—was that on a $100 contract, you would charge $107 if I went through Mr. Gauvin's shop, $100 plus GST. If I went through Consulting and Audit Canada on a $100 contract, I would be charged $115. That's an 8% difference. I could be wrong, but that's how it was explained to me, sir. That was the acceptable risk that I understood.
D/Commr Paul Gauvin:
No, I'm just trying to finalize the question.
We honestly felt that PWGSC meant we were totally protected because of their experience and expertise in government contracting. They are the experts; they do procurement on behalf of all departments.
As we heard today, in going to CAC there were issues, but I don't think anybody knew those issues were there. I mean, CAC was a very reputable organization; it had been there for a long time and it had done a lot of contracting for many departments. Therefore, what happened there was that there happened to be some collusion between two individuals, and that's where the problems occurred.
D/Commr Paul Gauvin:
I can talk about escalating cost, but I can't relate it to procurement, because this was a fairly large project, and the costs did go up, but they also went up in other pension plans, including those of the public service and the RCMP, because we were doing two things at one time here.
We had Bill C-78, I believe it was, which basically said that we were now going to invest the money in markets. As a result of that, we had to clean up the books; a lot of work had to be done to make sure that the records were proper, because money was now going to be invested in the markets, and as a result of that, we had to produce financial statements. If you have to produce financial statements, which have to be audited by the Auditor General, the information has to be right. That had to be done.
How you split up the escalating costs, whether it was just the outsourcing or also at the same time the cleaning up of the books—at that time we couldn't really split the difference.
Thank you very much, Mr. Poilievre.
Thank you, Mr. Marshall.
That concludes the first round. Before we go to the second round, I just have a couple of issues I want to pursue.
My first area is to you, Mr. Minto. I find some irony in your appearance here today.
Perhaps some of you aren't aware, but Mr. Minto is the former Assistant Auditor General of Canada. He has many, many years of experience as an auditor and he's extremely competent.
However, when did you move to the Department of Public Works?
Mr. Shahid Minto:
Not at all, sir.
The issue here is that internal controls that are established are designed for normal processes. When there is collusion, especially when there is collusion between employees of two separate departments, individual internal controls in the individual departments really don't function that well. You have to have somebody who can connect the dots between the departments to go there.
As Mr. Marshall said, what happened here was absolutely not acceptable. I sat in executive committee meetings and I sat in senior management meetings, and all the senior management in the Department of Public Works were appalled. This was not the way the Department of Public Works did business. It did not meet our standards. You can do all the churning and you can use all the words and say, “He did..., and he did...,” but there are managers who have to be accountable and it didn't work.
For us, the situation was simply this: What do we do? We have an organization here that provides a very important service to the Government of Canada. Over 100 government departments come to this organization for services. They provide audit services and consulting services, and the actions we took then were structural. We said, “We have to separate this organization.” We broke the auditing from the consulting. We got rid of their mandate to do contracting, because contracting should be done by the specialists in our contracting unit. We took some dramatic action in terms of public service HR, the number of things that Mr. Marshall has listed in the opening statement, from reprimands to termination. Very few departments go there. Then, sir, we did a lot of work to strengthen quality assurance and quality control so that we never see this happen again. We put in our energies into looking at an organization that provided a service and we determined that the important thing was not the structure of the organization that had led to these weaknesses but the service we provided, where we could provide it differently and better, and with better controls.
My last issue we really have to think about some time, that part of the issue here was that they were revenue dependent. CAC had to bill for its services. Rules dictate behaviour. We were in a situation where they could not control their cost. Somebody else was negotiating the salaries. They had limited control over the overhead they were being charged but they had to produce revenue. It's not an excuse. It's not a reason. It's never an acceptable reason to do what happened here. But in the context, you have to remember that.
Mr. Dominic Crupi:
Well, again, my manager went to staffing and asked about a process to follow. They were given a process to follow and they followed that process.
When that process was questioned before anyone was hired by the head of staffing at central region, there was a meeting of my manager and me with those individuals. We went through that meeting. They told us they would get back to the manager in a couple of days as to what process would be acceptable. Even though we worked with them up until that process, and we wanted to hire—we had a staffing individual with us at every step—they said “follow this process”, which my manager did follow.
So I'm at a loss to hear we didn't follow process. We had a staffing individual with us at every step.
When one of my managers asked if family could apply, we checked with staffing. Staffing said they had every right to apply, and in fact you couldn't preclude them from applying. That was the issue about staffing individuals who may have been related who applied.
Mr. David Marshall:
Mr. Chairman, I just want to reiterate that I have a lot of problems with the way these contracts were put in place. That's one issue.
The second issue is whether the contractors, having been put in place in an unfair manner, did any work or not.
On that second issue, from all that we can see, work was done, however they were originally selected. We saw evidence of time sheets, and the RCMP certified under section 34 that the work requested under the statement of work was carried out. So that part we tried to establish, and we're satisfied on that matter.
In terms of the RCMP investigation, they advised us by letter, because we referred the reports to them on July 27, that they had completed a review and could find no basis for a criminal investigation and couldn't find any basis of fraud at that stage. However, Sergeant Bonin said:
||In order to reach my conclusion, I have considered the reports from the external auditors received on June 9, 2005 and on July 25, 2005.
These are the KPMG reports.
They concluded that they were not going to do anything further, but he said:
||I am of the opinion that the allegations, although serious, are administrative in nature and as such could be more appropriately dealt with using existing internal mechanisms within your department. Moreover, the actions of Mr. Brazeau appear to relate more to a systemic and continued pattern of mismanagement along with an overall non-ethical conduct and are absent of criminal intent.
That's the way you would characterize it.
Mr. Brian Fitzpatrick:
I'm also particularly concerned about what Mr. Marshall referred to as a “rigged” process.
In some of the specifications, the qualifications seem to be rather arbitrary and not related to the job, but I'm really concerned about the scoring. We had one example in which one of the contractors had, I think, more than 30 years of experience in this area. Abotech, from what I can see, had basically zero experience on this contract, or very minimal experience, but on the scoring--and Mr. Brazeau did the scoring--Abotech got an almost perfect score in that area, and the one that had more than 30 years' experience was second to this Abotech. Is that a correct interpretation of what occurred?
Mr. Brian Fitzpatrick:
I'm running out of time, but I want to ask Mr. Marshall an important question.
I really thank Mr. Marshall for being here today. I'm really quite pleased with the action he took. This is what I think the public expects from public servants when they find things are out of whack.
In my mind, when I look through this audit with the 45 contracts and use the analogy of dice, if you roll the dice 45 times, it seems to me that certain people would get snake eyes every time, the way this whole set-up was arranged, and the other people who were bidding on this thing would have been suckers to be involved in that process. Is that a fair characterization?
D/Commr Paul Gauvin:
Yes, that is what I said. I would rather speak in English to better explain myself.
There was an amount that was a little over $600,000—I think it was $660,000, maybe—that was paid to Consulting and Audit Canada for what we're talking about here today, for the 15% fees for consultants who were referred to the RCMP. Out of that amount, there was a small amount that was not pension. So it ended up to be around $600,000.
Of that amount, Public Works has now reimbursed $200,000. Initially, our discussion was that not all the work had been done as it should have been done—they admitted that—but they also said that many of the contracts were processed as they should've been. So there's still around $400,000—a bit less, $373,000—outstanding.
Mr. Marshall has said here today that we are still negotiating that amount. Hopefully, in the very near future we'll come to a conclusion.
Mr. David Christopherson:
Thank you very much, Chair.
I'd like to follow up where Mr. Roy was, in part, just before we leave this, and Mr. Sweet was there too, this whole business of the competitive process being rigged. And we're hearing just anecdotal evidence that this is going on elsewhere.
I guess I'll go to you, Mr. Marshall. How far are you able to go in satisfying us that we don't have a major system-wide problem of former staff people who are working for the government who ought not to be because they're going through this circumventing process?
Mr. David Christopherson:
Yes, and I'm not sure that “reaffirm” is going to be enough.
I think it's something, Chair, that we need to make note of, and at the very least we should be sending some correspondence. We're so busy in terms of our agenda for the next while, but we ought not leave this alone, because the rigging is one thing, and then, potentially, people who are excluded from contracts being given work through this roundabout way. If it's there, it needs to be stopped and we need to find out about it. So that's another area we need to go into.
Mr. McEvoy, you used the word “flawed”. I think this has been mentioned before. This is contract number 560-3107, and it's this business of Abotech, on a scoring, winning way above. Would you just break that down again? In your own words, what has happened here? Why do you say it was flawed in terms of the scoring for Abotech?
Mr. Borys Wrzesnewskyj:
Thank you, Chair.
Mr. Marshall, you've been quoted a couple of times and I'll do it again. You said, “the whole thing stinks”.
When Mr. Crupi was asked about these contracts, he stated several times that he's not an expert in procurement.
Mr. Minto, you stated that it's quite evident that collusion between departments has taken place to circumvent the rules.
Mr. Crupi, are you expert in finding the loopholes to circumvent the rules?
Mr. Borys Wrzesnewskyj:
Thank you, Mr. Minto.
We do see a pattern here with the contracts. Certain people seem to win the contracts. We've just heard the Auditor General's report about nepotism. Mr. Crupi explained that he hired a third party to circumvent—as you said before, it appears rules are being circumvented—the rules and in that particular case 49 of 65 of the hires, quite a percentage, were family and friends. I guess family and friends were well taken care of.
We've just heard the case of Sharon Prenger. I guess there was nobody else to fill that particular job here in Ottawa. I assume a cost-benefit analysis, as Mr. Gauvin has stated, was done, but she was provided with an apartment somewhere in the range of $3,000 per month.
Then, of course, at one of the first meetings a staff member of Mr. Crupi's provided the whole formula, in fact, the mathematical formula on how to defraud the pension fund to pay for golfing friends at St. Andrews by-the-Sea.
This brings me to a question I'd asked you previously, Mr. Gauvin. You were part of the group that was golfing. At the last meeting before us here, we talked about ethics and the fact that you had to go for ethics training after the OPP investigation into the RCMP. It's not a big amount. But have you cut the $100 cheque to the pension fund to repay them for that golfing weekend?
Mr. Pierre Poilievre:
This relates to my question, Mr. Chair.
Mr. Chair, again, I don't want to raise another point of order. All I was trying to say—and obviously the witness is very defensive on this point—is that it seemed rather curious that he no longer had any involvement in the business when he'd gone on to work at Public Works, given that he had turned over some authority for running that business to his children, who were in their early teens. It does hearken back to some of the youngsters who have been involved in giving political donations that we've seen. Now we've learned that there are some who are involved in running businesses that are in blind trusts.
I'd like to get some factual timelines for when the ministers found out about these activities. Mr. Marshall, you said you briefed your minister in 2004 on these contracting irregularities at CAC?
Mr. David Marshall:
Yes, Mr. Chairman. Mr. Christopherson asked something similar.
It's really not possible to quantify it. But I think that certainly the Treasury Board Secretariat would be interested in sort of reinforcing or in some way perhaps even asking for a declaration from departments that it shouldn't be done, something like that, because I think it harms all public servants, this notion that there's collusion or helping each other circumvent the rules. I don't think it helps anybody. So I think it would certainly be a good thing to reinforce that issue.
Mind you, it is becoming more of an issue because of the wave of retirements and so forth. The pool of experienced people is reducing, so the risk that this will maybe continue is high, and I think it should be looked at.
D/Commr Paul Gauvin:
What the Auditor General said in her report was that when the RCMP went to Consulting and Audit Canada, perhaps the alternative would have been to do the work themselves. In other words, the RCMP should have done contracting direct.
She didn't say there was no value; she said little or no value. Basically what that means is that if the RCMP had done all this work, it still would have cost some money, because you have to get people to do this. The fact is they went to Consulting and Audit Canada, who are specialists.
In the RCMP, since I've been there, we recommend that people go through Public Works and Government Services Canada. That's because it's a large organization and it has a lot of pressures. People want things fast. They have criminal investigations and drug raids, etc., and you need whatever you need.
Mr. David Christopherson:
Of the former staff.
Anyway, it's important. I'll come back to it another time if I get the chance. Thank you for that.
I want to go over to Mr. Crupi.
Mr. Crupi, you will know that the Auditor General, on page 13, paragraph 9.33, said, “The NCPC Director”—that would be you—“circumvented competitions by using Consulting and Audit Canada (CAC) to hire individuals and firms he had already chosen to do work at NCPC.”
The deputies testified that you were relieved of certain authority as a result of this kind of activity. Your answer to that was that you weren't the only one, that there were other managers who had their authority restricted too, because there were other problems with managers. Do you stand by that, sir?