Mr. Chair, honourable members, thank you for the opportunity to appear before committee today. I welcome the opportunity to provide the facts as I know them and the actions I took.
My actions were both transparent and proactive throughout my tenure at the RCMP, and they were guided and supported by the values and ethics code of the public service. As a result of the reorganization of the human resources team, I became the director general of human resources systems and strategies, effective April 1, 2004. Among my many responsibilities was the National Compensation Policy Centre. I was in that role for 18 months. With regard to the timeline concerning my role, the facts are as follows.
Prior to my arrival, three events had already taken place: one, the RCMP internal audit of the pension plan had been concluded; two, the director of the National Compensation Policy Centre, Dom Crupi, had been sent home by the chief human resources officer; three, a criminal investigation that I later learned was called Project Probity had been launched.
Upon arrival in my position, I learned that the pension and insurance administration had been outsourced, based on incomplete and poorly written business cases. What I found was the governance model was not clear. These committees often directed work, requested research, and made other decisions without necessarily reflecting the National Compensation Policy Centre overall work plan. I had concerns about the insurance program, so I called for an internal audit. I disclosed to Barb George and Paul Gauvin my concerns with respect to the insurance program. They, along with the senior management team, supported my request.
Mike Gaudet, executive assistant to the chief human resources officer, Barb George, suggested that I contact Staff Sergeant Mike Frizzell and share my concerns with him in support of the work of the criminal investigation team. I did so. I made this call to Mike Frizzell on December 15, 2004, and he came to my office on December 20, 2004. I advised him that I had concerns and some information with regard to the pension and insurance program. Mr. Frizzell then asked if he could tape-record what became a three-hour conversation. At the end of it, he told me how he had presented then-past Commissioner Murray and the senior executive team with the RCMP core value statement, and that I epitomized those values.
I gave him the letter of agreement dated February 17, 2003, that was signed by Jim Ewanovich as chair of the pension advisory committee and Deputy Commissioner Pierre Lange, chair of the insurance committee that authorized what I believed was inappropriate funding of insurance activities. I also gave him a sketch of how I believed the funding flowed between Great-West Life, Morneau Sobeco, and the RCMP.
On January 5, 2005, I sent Mike Frizzell an insurance backgrounder paper that I had asked a policy analyst to prepare to help with understanding how insurance administration had evolved to this state. My next encounter with Mike Frizzell was on March 9, 2005, for a “life insurance/pension administration charges” meeting chaired by Deputy Commissioner Paul Gauvin. Several decisions were taken.
One was to “convene the insurance committee to request reversal of prior agreement related to the insurance administration paid by the pension plan”. I did this on March 15, 2005.
Two, I was directed to “present a letter to the insurance committee and the pension advisory committee chairs requesting reimbursement of the amounts paid to date from the pension plan to Great West Life”. The matter was to be resolved prior to fiscal year end.
I did not do this because it was not unanimous consent to reverse the moneys by the insurance committee at the March 15 meeting. Instead, I did speak to Barb George, outlining that authority to conduct this cleanup needed to be clearly directed by the commissioner. To my knowledge, the only letter that was drafted was by Denise Nesrallah, director of finance, asking Great-West Life to reimburse the moneys to the RCMP pension fund. The letter says, “Chairmen of both committees concur that the moneys paid to Great West Life Assurance Company to pensioners' portion of insurance administration outsourcing must be returned to the RCMP pension fund.”
Great-West Life replied on March 23, 2005, confirming the refund.
I was also directed to initiate
discussion of insurance administration costs to be paid out of appropriation to begin as soon as possible with Treasury Board Secretariat. Once resolved, if appropriation is to begin paying for the administration, discussion and decision to be made as to our ability to apply the resolution retroactively.
As a matter of information, I initiated those discussions with Treasury Board as early as June 2005.
Mike Frizzell attended this March 9, 2005, meeting. As the minutes indicate:
Inquiry was made as to our ability to speak to key individuals in order to obtain clarification concerning the insurance outsourcing. Confirmation was obtained from Mike Frizzell that his interview with Mr. Crupi is planned for Monday, March 14, and any discussion should take place after that date. Mike Frizzell stated that he would likely be in a position to respond to Mr. Gauvin's questions following the interview.
I advised Deputy Commissioner Lange, chair of the insurance committee, that an emergency insurance committee meeting was necessary to share the scope of the RCMP internal audit and what we had learned to date.
The deputy chaired that meeting. I spoke to the scope of the audit and said that the draft audit findings were expected in April, 2005. I also explained that there had been a decision taken in February, 2003 between the chair of the pension advisory committee and the chair of the insurance committee that allowed moneys to be taken from the pension plan for insurance outsourcing, and that this decision should be reversed.
There was no motion made at this meeting, and I reported back to Barb George that the commissioner would have to be the one to direct who had the authority to undertake this activity.
On March 21, 2005, I sent Mike Frizzell the internal audit draft report of insurance plans. It supported the concerns I had shared with Mr. Frizzell on December 20, and with my superior when I requested the audit. I know Mr. Frizzell received it, because he called me to confirm that it had come from me.
The last time I heard from Mike Frizzell was in the voicemail he left me the first week of June, 2005, alleging that deceit and corruption was ongoing in the insurance program and that senior management knew about this.
This was a serious allegation, and I immediately called the senior authority on the investigation, Inspector Paul Roy, and asked his advice. He advised that they were in the report-writing phase of the investigation, that Chief Bevan would be briefed in a week, that the RCMP commissioner would be briefed June 24, 2005, and that the RCMP senior executive committee briefing was scheduled for June 27, 2005.
He advised me that Mike Frizzell was probably not speaking on behalf of the investigation and that this could be the result of some personal fallout, and he recommended that I not accept Frizzell's suggestion to meet.
I followed his advice. I subsequently reported the voicemail and my actions to my superior, Barb George, who assured me that I had done the right thing.
My responsibility in insurance was to prepare the management action plan, which consisted of corrective administrative actions to the RCMP internal audit.
To do this, I initiated an actuarial review conducted by the Office of the Superintendent of Financial Institutions to ensure the longevitiy of the insurance plans. I requested a legal opinion to determine authorities to administer the insurance program. I contracted a study on the group life insurance administration framework by Mercer Consulting Group. I obtained the first-ever audit of the group life financial statements. And I initiated discussions with Treasury Board Secretariat officials regarding governance and authority on the insurance plan, on June 20, 2005.
To undertake this work in accordance with government policies and procedures, there was a working period that included the following actions on my part. Between June, 2005 and October, 2006 the National Compensation Policy Centre prepared statements of work and requests for proposals, reviewed and evaluated bids from contractors, and provided regular briefings to the RCMP audit and evaluation committee, the RCMP human resources council, and the RCMP insurance committee on progress to date.
On October 30, 2006, I updated the RCMP insurance committee on the management action plan, and it was up to the committee to take action on the studies and information provided.
My comment to the insurance committee was that from what I had seen from the draft of the Office of the Auditor General's report was that there would be no surprises and that the corrective actions were recognized by the Auditor General.
The file was reassigned by Assistant Commissioner Kevin Mole from me to an Inspector Tony Pickett after that meeting. He told me it was not a question of competence, but that I was a risk because, to use his words, “the RCMP does not own you”. That was the end of my involvement.
I welcome all questions and queries from this committee, and I want to assure members of this committee my full cooperation in this and related investigative processes.