Public Accounts Committee on May 29th, 2007

[S/Sgt Mike Frizzell]

That again was changed by Mr. Crupi in 2003, when the outsourcing kicked in and that large amount of money was being drawn out. The basic life insurance, which is the biggest, was cut down to 20%. And the disability insurance, none of which was being administered by Morneau Sobeco, was paying 40% of the bill.

[The Chair, Liberal, Shawn Murphy]

Okay, John.

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

I wish I could continue, Mr. Chairman.

[The Chair, Liberal, Shawn Murphy]

Well, we had better move on. The bells are going to be ringing here soon.

Mr. Christopherson, you have five minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

I want to come back to this business of Morneau Sobeco. I'm having a lot of trouble understanding why NCPC would put themselves through such a wringer—questionable legal activities. It's one thing to want to go with something that's convenient. We all want to have our jobs every day be as convenient as possible, and if going here is easier than going there, well, what does it take to get us there? I think everybody sort of lives by that. But once that starts to become problematic, there are trade-offs. We're talking about the RCMP. You start getting into legal matters. It's becoming a huge issue. It's ultimately led to all this.

I'm having trouble understanding why that wouldn't be looked into more. That is at the heart of this. Had there not been an effort by NCPC to insist that it be Morneau Sobeco exclusively, without having to go to a public tender, we wouldn't be here.

I'm still not satisfied I'm hearing adequate motivation. Why? Why were they willing to go so far, so persistently, just to make life easier? It doesn't sound like it. To me, the savings of going with this process as opposed to the grief it was causing them to do it makes it a negative trade-off. Help me understand.

Also, we're on limited time. Feel free to slip into—I want to hear a little more about the specificity of the mandate that you weren't to look into this. I'd just like to hear a little more on that too.

[S/Sgt Mike Frizzell]

Okay. First off, I don't understand either. There are a number of theories. You know, you're an inch into the room, then you're two inches, and by the time you stop and look back you're halfway across the room.

It was a pretty good deal they had going. Great-West Life was going to be administrator; nobody was going to ask any questions. Mr. Crupi had already committed to that insurance outsourcing happening. He was going to bring in both insurance and pension outsourcing. When some hiccups came in along the way, they found ways around them.

How this happened in our organization is beyond me. I've asked that question very many times. I have a very hard time believing that Mr. Crupi would have been so bold as to do all that on his own.

Now, what was the other question?

[David Christopherson, NDP, Hamilton Centre, ON]

It was on the specificity of the mandate. You said that you were specifically mandated not to look into that very question.

[S/Sgt Mike Frizzell]

The original mandate of the investigation was to follow the pension money: where did it go, and was it spent in a criminal manner? So $20 million-plus went to the outsourcing of the pension. We had a lot of questions around that. As we had questions and we found more and more, our mandate was constricted.

At one point I had an argument with Mr. Gork, who told me that our mandate was to investigate Mr. Crupi and Mr. Ewanowich. I explained to him, no, we don't investigate people; we investigate events. The event was the misuse of the pension funds.

[David Christopherson, NDP, Hamilton Centre, ON]

Are you satisfied that there's no question or no need to investigate whether or not there were any questionable activities? I'm talking dollars now. Are you satisfied that that is not here?

[S/Sgt Mike Frizzell]

Not at all, but I'm—

[David Christopherson, NDP, Hamilton Centre, ON]

I know you're not making that accusation, but you can't remove that either, at this stage.

[S/Sgt Mike Frizzell]

No, the horse is out of the barn. To go back now—

[David Christopherson, NDP, Hamilton Centre, ON]

And costs went up, too. It was double the cost. So we are talking about some extra money here. It does beg the question--at least the question--of whether somebody was benefiting, aside from making ease of working life, as a result of getting this deal. You can't tell me that's not—

[S/Sgt Mike Frizzell]

We never executed any warrants on bank accounts or anything like that to be able to tell you that.

[David Christopherson, NDP, Hamilton Centre, ON]

In both your minds, is this an unresolved area that still could use some further light being shed?

[S/Sgt Mike Frizzell]

At the time, I wanted to investigate that.

[C/Supt Fraser Macaulay]

Absolutely.

[David Christopherson, NDP, Hamilton Centre, ON]

Does it remain a concern, though, to get this whole picture?

[C/Supt Fraser Macaulay]

Yes. One of our issues is that somebody review the criminal investigation to determine whether it should be reopened. That's one of the things we would like to see done.

[David Christopherson, NDP, Hamilton Centre, ON]

The minutes being doctored still hasn't been looked at, has it? Who would have done that?

[S/Sgt Mike Frizzell]

If the complaint was made to Ms. George, then she is bound by the RCMP Act to ensure that it's investigated.

[David Christopherson, NDP, Hamilton Centre, ON]

And we're still waiting for a conclusion on those minutes, Chair? I think I heard that earlier. Is there anything outstanding on that that somebody's doing for us?

[The Chair, Liberal, Shawn Murphy]

No, I don't think there is, David.

[David Christopherson, NDP, Hamilton Centre, ON]

So what did you say? I'm sorry. The deputy commissioner has committed to what on that?

[C/Supt Fraser Macaulay]

My understanding was she committed to giving you a follow-up as to where that is at present.