Public Accounts Committee on May 14th, 2007

[D/Commr Paul Gauvin]

And last week or the week before, when you told me it was easy and I disagreed, you were right. It was an easy transaction, sir.

[John Williams, Conservative, Edmonton—St. Albert, AB]

I'm still confused with all this money floating around--this half a million, $570,000, cheques from Great-West Life to cover off.... I think it first went into the insurance and then it went to the pension. Why was this money floating around?

It seems to me, if I'm right, that there was money paid out to begin with and then it was reimbursed by Great-West Life. Were you aware that this money was coming back from Great-West Life? You were the CFO, remember.

[D/Commr Paul Gauvin]

I explained that before, I think.

There was an agreement made between the insurance committee, which was chaired by a deputy and the CHRO, I believe, at the time--or maybe he was just a member of it.... It was chaired by the deputy commissioner for centre region. They agreed that because the insurance recipients--40% of them were pensioners.... They made an agreement between the two of them that 40% of those costs would be charged to pension. They actually charged it there.

Now, we didn't know about that until we actually got an invoice that was required to be paid. They didn't tell anybody of this arrangement. All of a sudden we got an invoice. We looked at it and said, “What do we pay this against? This doesn't make sense.” So we looked for a contract or an MOU or something. Finally we found a letter that had been agreed to by the CHRO and the chairman of the insurance committee. Then we found an agreement with Great-West Life that had been signed by Great-West and Morneau Sobeco and signed off by Dominic Crupi. Then we looked at and said we can't charge it.... It doesn't make sense to leave this in pension, because insurance has nothing to do with pension. So immediately we took action to take it out of pension, because it shouldn't have been charged there.

We were left with two alternatives. Where do we charge it? We can charge it to appropriations or we can charge it to the insurance premiums. The first option for the commissioner and myself was to charge it to appropriations.

[John Williams, Conservative, Edmonton—St. Albert, AB]

I'm a little confused here. You talked about charging something. I thought you received a cheque. Weren't you crediting something here?

[D/Commr Paul Gauvin]

No; initially it was charged to pension.

So then we got a cheque back from Morneau to take it out of pension because it shouldn't have been charged there in the first place. So we credited the pension, as it should be, and then we had no place to charge it except for life insurance premiums, because in the meantime we also got a legal opinion—in fact, we got two legal opinions, one from Treasury Board and one from our own legal adviser—that said we cannot charge it to appropriations because the RCMP does not have authority to operate a life insurance plan.

Just to finalize—and I know it's taking a few minutes—now HR is doing a whole lot of work with the Treasury Board to determine what we're going to do with this in the future. Obviously, RCMP members have to have insurance. They're in a dangerous profession. So we have to decide now where we go in the future, and get authority, first of all, to operate this, and secondly, where we charge it.

[John Williams, Conservative, Edmonton—St. Albert, AB]

I was trying to get just a simple answer, Mr. Chairman, on the application of the cheque, and now we're into whether the RCMP should have insurance or not. We keep meandering and wandering all over the place. I still really don't have a clear answer to my simple question. We went from cheques being received to invoices being issued to the RCMP that they couldn't understand, and they go back and dig through some contract and they find, well, maybe there's a 40% share. It seems just a real dog's breakfast to me.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Williams.

Maybe, Mr. Gauvin, you'd want to take time and come back with a little more in a written response to that question.

Mr. Williams' time is up.

That, colleagues—

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

On a point of order, Mr. Chair, I have to make a point on the record here, because some of our viewers might be misled by the proceedings today—

[The Chair, Liberal, Shawn Murphy]

The viewers might be confused.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

—if this point is not made.

That is, we have these documents. I understand the clerk got them only at the last minute, so I don't blame him at all for getting them to us a few minutes later. But the testimony that Mr. Girard made earlier on would lead a lot of people listening to it, without access to these documents, to believe that his inability to present as a candidate for the staff relations association was in some way linked to this pension and insurance issue.

These letters, just for the record, indicate that it has nothing to do with the pension and insurance issue. There seems to be some considerable controversy over whether RCMP members should unionize. His organization or his lobby group seems to express the view that they should. I'm not really of a strong opinion either way; it's not my role. I just want to make it clear that this individual was not forbidden, according to this information, from running because of anything related to the pension or insurance scandal that we're debating and discussing here, but rather over some other entirely extraneous dispute over whether or not RCMP members should unionize and whether or not he should be allowed to advocate for their unionization.

I think it's an important distinction, and I just wanted to put that on the record.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Yes, and as you know, Mr. Poilievre, those documents will form part of the committee's deliberations.

[David Christopherson, NDP, Hamilton Centre, ON]

Mr. Chair, he's the only one who said the word “union” here all day.

[The Chair, Liberal, Shawn Murphy]

Mr. Lewis had explained that too.

I have a couple of questions before we go to round two.

Mr. Spice, your name has been mentioned before, and no doubt you're following the committee's proceedings. There have been a number of members who certainly feel, and I think it's supported, that their career has suffered as a result of them coming forward: Fraser Macaulay, Mike Frizzell, and Denise Revine. I understand some of those people went to you initially with some of their concerns.

[A/Commr John Spice]

Ron Lewis, Fraser Macaulay, and Denise Revine did have conversations with me, met with me regarding their concerns. In fact, we met with the director of audit to outline their concerns to him and to indicate to him my concerns vis-à-vis the internal audit and the fact that, in my view, the behavioural issues, the abuse of power and authority, the poison work environment, and so forth had to comprise part of his audit in order for it to be meaningful. It couldn't just be about the money.

[The Chair, Liberal, Shawn Murphy]

Mr. Spice, I don't have the exact transcript, but my recollection of the testimony was that you told them basically there was very little you could do for them, that they were on an island and they weren't going to get much institutional support from the force. Is that your recollection?

[A/Commr John Spice]

Mr. Chair, I think you're misquoting me. I think the island comment was related to Deputy Commissioner Barb George and her conversation with Fraser Macaulay.

I did, however, have several conversations, over time, with the commissioner regarding both Mr. Lewis's concerns and Fraser Macaulay's issues. Indeed, I believe, if memory serves, that I forwarded a copy of an e-mail to the commissioner that I received from Denise Revine.

It became clear to me that things weren't progressing well, but as soon as the audit was called, I felt that we'd gone to the extent we could and that we should allow that audit to continue. The audit would then follow....

The process, for example, is that if you call for an internal audit--and I worked in audit many years ago, but I believe the principles still apply--you do the audit, and as soon as you determine that any criminality is involved or that there are code of conduct violations, you suspend the audit and proceed with the criminal investigation.

So the audit was ongoing. I had satisfied myself, certainly, that the auditors were going to be doing everything they possibly could to get to the bottom of this. I know that both Fraser and Denise had reservations regarding that, and we met with the auditors to spell out what those concerns would be. I reiterated to the auditors at that point in time that if I were dissatisfied with the results, I would then go outside to the Public Service Integrity Office, because as a senior officer for internal disclosure on wrongdoing, it was my obligation to do so.

Now, I didn't see the audit report when it was completed, and I was gone from the organization by the time the Ottawa Police Service investigation was completed.

[The Chair, Liberal, Shawn Murphy]

Mr. Spice, the point I'm making--and I want to get your comment--is that it's my view that the institution failed certain of these people.

Take, for example, Ms. Revine. She was there for 33 years. She came forward with certain allegations, and her job was sacked. We want people in the public service to act and behave ethically, and that was your job, sort of, as the ethics adviser. Certainly from everything I've heard and seen at this hearing, she did act ethically, and she lost her job.

Was there anything your office or the institution could have done, in hindsight, to protect this lady?

[A/Commr John Spice]

Absolutely.

May I read something to this committee that I wrote? It's salient to that issue. It's brief.

[The Chair, Liberal, Shawn Murphy]

Is it a document?

[A/Commr John Spice]

I've given it to the clerk, so everybody should have it. It's not translated, of course, and I apologize for that.

[The Chair, Liberal, Shawn Murphy]

Okay. Read it to the....

[A/Commr John Spice]

“What the Public Accounts Committee is presently dealing with is a result of RCMP culture and behaviour. The unethical behaviour of certain individuals created this situation, in my view, because of the phenomenon of Noble Cause Corruption.” Noble cause corruption is simply the belief that the end justifies the means. “When employees do not see people held accountable for unethical behaviour, or they witness unethical behaviour that goes unchecked, they then sometimes begin to model the behaviour. Of note to this Committee is that in August of 2005, I returned on a personal services contract to examine RCMP Corruption.”

At that point in time, the file, Project Probity, as the Ottawa city police investigation was named--I made reference to it in that short 42-day contract I had.... I suggested to the deputy commissioner in charge of human resources, the chief human resources officer, Barb George--as well, I had discussions with the officer in charge of the criminal intelligence directorate about my project--that they look at that file as it related to corruption.

To move on, “I want to point out to this Committee that the actions of Ms. Revine are to be commended. She had the ethical courage to bring this matter to the attention of C/Supt. Fraser Macaulay despite the fact that she knew that she was opening a pandora's box. She is not a 'Whistleblower'.”

I know that she's been referred to as a whistle-blower in this committee and certainly in the media. She is not a whistle-blower, in my view. She's a dedicated public servant who did her job.

“The RCMP should be extremely proud of her dedication in this matter. The actions of Fraser Macaulay, Ron Lewis and Mike Frizzell should also be commended. Both C/Supt. Macaulay and S/Sgt. Mike Frizzell have weathered criticism and even disdain for their tenacity. That, Mr. Chair, is just fundamentally wrong. I find the behaviour of some senior managers, from whom you've heard testimony, very disturbing. Had this matter been dealt with appropriately, at the outset, in accordance with the RCMP's values of Honesty, Integrity“--and professionalism--“Compassion, Accountability, and Respect none of us would be sitting here today.”

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Spice.

In hindsight, was the failure one of civilian oversight? What's the number one failure that you can point to that caused this problem—which you've identified, by the way?

[A/Commr John Spice]

I think it's the culture. It's culture and behaviour. Unless the culture and behaviour change.... And it's not something that's unique to the RCMP; it's prevalent in government as well, ladies and gentlemen. I think it's something that exists, whether in private industry or public offices, and it's something we have be in tune to.

[The Chair, Liberal, Shawn Murphy]

Thank you very much.

We're going to go to the second round, of five minutes.

Mr. Wrzesnewskyj.