Public Accounts Committee on May 7th, 2007

[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.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Okay. When the internal audit was taking place, during that internal audit in 2003 or soon afterwards, did you tell Deputy Commissioner Barb George in conversation that there was only a couple of hundred thousand dollars misspent, and to give Ewanovich and Crupi a slap on the wrist and to move on?

[D/Commr Paul Gauvin]

Absolutely not, sir. What I said at the time was that there were some issues around this project, and that our own internal auditors had felt at the time that some moneys were not properly accounted for.

What the discipline was or what the result was had nothing to do with me. That was basically not my area of organization. I have nothing to do with discipline in other areas within the RCMP. That is an HR issue. On this particular one it was an HR issue, and if anybody had been responsible for discipline, it would have been the deputy commissioner of HR; it would not have been me.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Okay. Are you a member of the RCMP performance pay committee?

[D/Commr Paul Gauvin]

Yes, I am.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Why did you agree to provide Mr. Crupi with a substantial performance pay in 2003 when you previously revoked his contract or changed the contracting authority in 2002 for some of these violations?

[D/Commr Paul Gauvin]

Sir, I don't remember whether Mr. Crupi got an increase. We sit as a committee of deputy commissioners. We look at probably 150 files. We all give our thoughts, and at the end we make recommendations to the commissioner, who decides whether he agrees or disagrees.

I'm sorry; I can't remember today what we did with Mr. Crupi or virtually anybody else in...I think you said 2002 or 2003.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

It was in 2002, yes.

Mr. Crupi, we've heard a lot about the contracting and the nepotism. Did you pay from the pension fund for such items as gifts for departing employees of the pension advisory committee? Was there a payment for an Ottawa apartment for a female employee—a Sharon Prenger, from British Columbia—and also for language training for you?

[Dominic Crupi]

In relation to gifts, I was directed to provide gifts by the chair of the pension advisory committee, to make sure there was an appropriate gift, so we were directed. That probably would have been through the secretary of that committee, because he did the bidding of that committee, so that would be that.

With reference to an apartment, we had seconded an individual who was an expert from Vancouver. They went to the finance people and found out the process for accommodation while they were here—follow the rules, what was allowed to be paid, where they were allowed to be kept. They were from Vancouver. The RCMP paid for their stay.

I can't—What was that third one, sir?

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

It was about your language training, out of the pension fund.

[Dominic Crupi]

I believe that was just a misquote, sir. It should not have ever come out of the pension fund. I have not charged the pension fund; my salary was charged to regular payroll.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Mr. Crupi has just told us, Mr. Gauvin, that one of the female employees' apartment rent—and we don't have the exact number, but I understand it was between $32,000 and $39,000—was authorized from finance. Was this appropriate, sir?

[D/Commr Paul Gauvin]

I don't know this particular transaction. I don't get involved in transactions. But I will say that we're an organization of 26,000 people—

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

But is it appropriate? That's my question.

[D/Commr Paul Gauvin]

Well, that's what I'm getting to.

We are an organization of 26,000 people. From time to time we have large projects in headquarters and we second people from the regions. While they're here, we would pay their living expenses. Now, whether or not they would pay for an apartment.... I guess they would look at some sort of cost-benefit analysis and see whether it was more expensive to stay in a hotel than to rent an apartment for the time they were here, and that decision would be made. But that decision would be made by the responsibility centre concerned based on a sound business case.

[The Chair, Liberal, Shawn Murphy]

Mr. Poilievre, you have eight minutes.

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

Mr. McEvoy, this is on contract 560-3316. As I read the six or seven pages that you've dedicated in your audit to Abotech Inc., there's this contracting pattern that bothers me: people are being paid to pass contracts to other people who pass them to other people who pass them to other people, and everybody seems to get a piece of the pie along the way, and it's not discernible what work is actually done in each of these steps.

I'm just going to confirm that I understand it correctly. Anthony Koziol was hired as a project manager. Is that right?

[Greg McEvoy]

That's my understanding from the descriptions in the contracts, yes.

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

Okay. And then he passed a contract on to Frank Brazeau's organization, Consulting and Audit Canada. Is that correct? Basically he retained Consulting and Audit Canada to find contractors. Is that correct?

[Greg McEvoy]

He retained Consulting and Audit Canada to conduct the contracting process to get resources.

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

That would have been a 15% charge on the—?

[Greg McEvoy]

I think the charges varied a bit, but 15% is the rough range, yes.

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

Then, from Mr. Brazeau's Consulting and Audit Canada, a contract was awarded to his cousin David Smith at Abotech Inc.?

[Greg McEvoy]

There were two contracts awarded, yes, to Abotech Inc.

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

Okay. Then Mr. Smith hired an RCMP procurement specialist, Mr. Onischuk, and this is the final contractor. Is that right?