Evidence of meeting #55 for Public Accounts in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contracts.
A recording is available from Parliament.
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
My last question is for you, Mr. Marshall. Can you tell me how KPMG was hired on? Can you reassure me in some way?Was there an invitation to tender?
Deputy Minister, Public Works and Government Services Canada
KPMG was on a standing offer that had been established through a competitive process, so we engaged them in October 2004 to do this work.
Just coming back to this notion that a public servant can be, if you like, bonded through another company to circumvent the rule that you shouldn't double-dip your pension and your own salary and your consulting money, I believe there was an indication on the Treasury Board website that if a person came through another company, it didn't apply--this notion of having to balance or declare your pension. Truthfully, I think this was meant to be something where an employee might be with a large corporation, like IBM or something. It wasn't meant to be an excuse to do something by one means that wasn't allowed by another means. I'm sure that if you asked the Treasury Board, they would be a little bit discomfited to think that this was thought an acceptable practice, although I think a lot of people took some specific words and decided to interpret it that way.
Liberal
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Thank you, Mr. Chairman.
Mr. Marshall, I just want to confirm some things that you said. You mentioned that you were briefed. Was it June 2004 that you were briefed on the situation?
Deputy Minister, Public Works and Government Services Canada
I think in June 2004 the internal audit commenced at Consulting and Audit Canada. About September of that year the chief auditor saw me and expressed concerns verbally.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Then you subsequently said that the minister was briefed in March 2005. Is that correct?
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
On all of the dimensions, at least the draft report at the time, and the circumstances surrounding the investigation?
Deputy Minister, Public Works and Government Services Canada
In March we didn't have a draft report, but we had findings that were emerging and we were worried about it. We would have briefed the minister on it.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Thank you, Mr. Marshall.
You said the whole thing stinks, that the process was rigged. You just mentioned that it would not be acceptable to do something indirectly that you would not do directly.
Mr. Smith, I want to ask you this. You're a former member of Parliament. With respect to what has gone on here, where someone who normally would not be eligible to be hired is referred to you so that you can draft an RFP so that they can subsequently be hired to circumvent rules that you wouldn't be able to break directly, but are able to do indirectly, do you think that's right?
As an Individual
Listen, if I would have known that this wasn't permitted by law, I wouldn't have done it. The people got their work for it. The gentlemen at KPMG didn't evaluate Abotech; they evaluated the individual who was the consultant. So the person who got the work done was the consultant. Statements of work were signed by the proper authority saying they received the work. Abotech was a placement company, and there are hundreds of them in the Ottawa region.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Did you not see anything unusual or out of the ordinary? If Mr. Brazeau referred someone to you who you didn't know previously, you simply knew them from their CV, and then days later you put an RFP in, and you received a fee for doing that, you didn't find that in any way unusual?
As an Individual
Well, listen to me. I live in the national capital region. I know there are a lot of public servants who take their retirement. Some of them within a few months go back to work on employment within their own department, so they're going through a service. I was offering a service like the other companies offer services. My rate was cheaper, so it was a rebate for the government. I paid the people immediately when work was delivered, after having received the statement of work. It was an honest, small business.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
So you still want to hold to that, that it was an honest, small business, even though there are many businesses that would've liked to have competed on an equal basis for this business. Yet having consultants referred to you who would be put into a bidding process where two or three others who were unlikely to actually even submit to the RFP—that was all legitimate. Do you feel good about that as far as taxpayers are concerned?
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
I'm just asking you if you feel good about that.
As an Individual
I'm telling you that I've done this honestly. People contacted me. They could have contacted—They were given other names. My rate was cheaper. The people wanted the work. When we submitted their résumés, they were evaluated. The department wanted that individual. There were four or five corporations that were invited to submit candidates. I was from the exterior. I wasn't in the evaluation process. The people came to me. It was simple because they were paid immediately after having received the statement of work, sir.
If you're accusing me of something, you can repeat—
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Let me ask you another question, Mr. Smith. Did you have any conversation with any ministers or any ministers' staff regarding your ownership or interaction with Abotech?
Conservative
As an Individual
Before being a member of Parliament, I used to see the other members of Parliament, like any other citizen, through TV or newspapers, sir.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Yes, but did you talk to them about the contracting aspects of Abotech and CAC?
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
No, while you were a member of Parliament.
As an Individual
I met the Ethics Commissioner. I filled out the complete documentation.
