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.
4:50 p.m.
As an Individual
That would have been Superintendent Guy Fortin, who was the director of NCPC at that time.
4:50 p.m.
Liberal
4:50 p.m.
As an Individual
Mr. Gauvin alluded to a project that had the money charged and was being invested into the marketplace. I was responsible for that project for DND, RCMP, and Public Works. Through that, as the RCMP's representative, that's how I met Superintendent Fortin, but it was when I was working with Public Works. That's how I knew the individual.
4:50 p.m.
As an Individual
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.
4:55 p.m.
Liberal
Judy Sgro Liberal York West, ON
Mr. Smith, when you were elected as a member of Parliament, you had a discussion with the Ethics Commissioner.
4:55 p.m.
As an Individual
Absolutely. When I was elected as a member of Parliament, I completed both documents that were requested. I spoke to the people at the Ethics Commissioner's office and supplied all the information very transparently. When KPMG got in touch with me, I contacted the Ethics Commissioner's office to advise them that KPMG wanted to discuss previous business with Abotech. I met the people from KPMG. I was very transparent and supplied all the information requested.
Also, what seems to be too bad here—I didn't see the report—is that we're saying they're not sure whether they got their money's worth for the work. Public Works has all the documents and all the statements of work that were signed for every job that was done.
4:55 p.m.
Liberal
Judy Sgro Liberal York West, ON
I have one last question.
Deputy Commissioner Marshall, in your opening statement you have a paragraph that says:
The RCMP has advised us that there is no evidence of fraud. As well, additional investigation by PWGSC's 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.
That leads me to believe that you don't have a lot of concerns with how things went.
4:55 p.m.
Liberal
4:55 p.m.
Deputy Minister, Public Works and Government Services Canada
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.
4:55 p.m.
Liberal
The Chair Liberal Shawn Murphy
Thank you very much, Mr. Marshall.
Thank you, Ms. Sgro.
Mr. Fitzpatrick, you have five minutes.
4:55 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Thank you very much.
I want to broaden this topic out a bit. We've basically talked about two contracts, but really, the audit dealt with 41 contracts, worth somewhere between $6 million and $7 million. Isn't that right, Mr. McEvoy?
4:55 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Okay, 45. And the amount is between $6 million and $7 million, in total.
There are other contractors involved besides Abotech in your inquiry. Is that correct?
4:55 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
When I read your audit, the same pattern seems to occur in the contracting, whether it's with Abotech or the other contractors that you dealt with as well.
5 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Okay.
The audit was also expanded because of the problem. You went into other areas that were not related to the pension plan of the members here, of the RCMP. You found, particularly with Abotech, that this sort of pattern also existed in other areas as well.
5 p.m.
Associate Partner, KPMG
Yes. It was because part of the work we were doing with the NCPC was looking at the email and computer of Mr. Brazeau, and we identified this relationship to Mr. Smith.
5 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
There's another thing I want to get clear here too. In past audits I've heard an auditor say that money passed through people's hands, and they seemed to be charging commissions and getting money for doing little more than simply passing money down the line. A few years back, the Auditor General made those sorts of comments.
Is it not a fair observation that what we have here is 15% going to CAC and 7% going to the middleman, the contractor, to take something off the top, when basically all they were providing was a flow-through? The money was passing through their hands and going down the chain, but they really weren't doing any of the contracting work. Isn't that a fair comment?
5 p.m.
Associate Partner, KPMG
They were providing an administrative function, but I think you could look at some of the examples in the report and see instances in which you had a resource working for a client department directly, and then all of a sudden they were working through CAC and Abotech to do the same work.
5 p.m.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
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?
5 p.m.
Associate Partner, KPMG
Well, I think we heard Mr. Brazeau answer earlier as to whether or not he scored that evaluation, but that's what the evaluation reflected, yes.