Public Accounts Committee on Dec. 14th, 2010

[Michael Nelson]

The audit committee was created in January 2009, which was after the initial complaints, at least. Presumably, some of the events had already happened. The committee was made aware in 2009 of the complaints and the fact that the Auditor General was looking into them. However, the audit committee's first substantive discussion about what was going on inside the audit, the first time members heard about it, was in November 2009. There was a more substantive in camera discussion in January 2010.

First of all, I'd like to point out the role of departmental external audit committees. They are advisory to the deputy minister or deputy head. Knowing that the--

[David Christopherson, NDP, Hamilton Centre, ON]

When you say “deputy head”, do you mean the commissioner, in this case?

[Michael Nelson]

In this case, I do, yes.

[David Christopherson, NDP, Hamilton Centre, ON]

Who appointed the external audit committee?

[Michael Nelson]

The deputy head did.

[David Christopherson, NDP, Hamilton Centre, ON]

That's problem one, but okay, go ahead.

[Michael Nelson]

That was according to the Treasury Board policy as it's being interpreted by the agents of Parliament.

With respect to this particular audit, I was not the chair at that time, but I spoke at length yesterday to Mr. Jean-Pierre Soublière, who was the chair at that time. He contacted Mr. John Wiersema and spoke with him to see if the audit committee could help express the fact that the internal audit committee did not intend to get in the way or interfere with the process--because obviously the Auditor General was on the case--and to encourage the Auditor General to proceed as quickly as possible with the audit.

[David Christopherson, NDP, Hamilton Centre, ON]

If I understand, your predecessor's contact with Mr. Wiersema was about beginning a process of reviewing some of these concerns or stepping in.

[Michael Nelson]

No, it was not. It was to say that we'd been made aware that a process was going on, that the Auditor General was looking at these complaints, and that as the internal committee, we were aware of them and would follow the process but did not intend to get involved in an audit that was already being conducted by the Auditor General.

[David Christopherson, NDP, Hamilton Centre, ON]

At that point you sort of became hands off. There was a higher authority in this, so you would let go. Or was it not your area of concern? I'm merely asking.

[Michael Nelson]

Certainly. The key concern of the audit committee at the time was to make sure that whatever had happened was not still happening.

At that January 21 meeting, where there had been an in camera discussion of the audit that was in process, the chair of the committee and the members met with four of the members of the staff. They asked them whether whatever had been going on was still going on, whether they were comfortable, and whether there was anything the staff wanted to tell the audit committee. The answer was no.

[David Christopherson, NDP, Hamilton Centre, ON]

Do you think they were frightened?

[Michael Nelson]

I wasn't there, but I did ask. Again, I asked the chair of that committee yesterday so that I could speak as truthfully as possible to this committee. They felt there was no atmosphere of fear and that they were being told the truth. They met individually, in camera, with each of these four individuals.

Throughout the rest of the year, 2010—I came on as chair in March 2010—I was aware of the audit itself. In April, I attended, at the commissioner's invitation, an all-staff meeting—there are only 23 to 25 staff members—at which the commissioner said to all staff present, while I was in the room, “You all have individual access to Michael Nelson at any time you want about anything.” That's a little unusual for an audit committee member, but I'm not a terribly intimidating person and I felt comfortable with that invitation.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

Do I have a little time left?

[The Chair, Liberal, Joe Volpe]

No.

[David Christopherson, NDP, Hamilton Centre, ON]

Oh, I don't. Well, maybe the Auditor General could speak to that in another question.

[The Chair, Liberal, Joe Volpe]

Yes, she can, on the next round.

We'll go to Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you, Chair, and good morning.

And thank you to all of the witnesses for being here today to discuss this very important, and troubling, topic.

On behalf of the government, I would certainly like to thank the Auditor General for her exceptional work on this special report on the Public Sector Integrity Commissioner.

Quite frankly, if we don't have confidence in what we're doing here, the system doesn't work. This is absolutely crucial to where we go forward as a parliament. I can assure you that we do appreciate the good work on this file.

We would expect—not just hope, but expect—that the new interim commissioner will follow up on all these cases and initiate an immediate review. I would expect that, and I would imagine most of my colleagues would expect that as well. Of course, we will see what comes down the pipe, but I think that expectation is there.

I think we also have to recognize, as Madam Fraser has alluded to, that the appointment we have now is for a temporary interim commissioner. I fully imagine a selection process will be launched very shortly to identify and appoint a new one. I think as well we have to recognize that the appointment of this commissioner—and it was touched on by Madam Fraser—will be done after consultation with the leader of every recognized party in the House and the Senate, and after approval of the appointment by resolution of the House and Senate.

Coming from a person who has sat on government operations, we examine the qualifications and of course the competence of the nominee. I guess that comes back to Mr. Christopherson's point: maybe Parliament has dropped the ball a bit here. Obviously we have a regime in place, but the former commissioner broke or disregarded the policies in the act.

It's quite evident that the rules weren't followed. We find that very troubling. The same commissioner was also before parliamentary committee five times and we didn't pick up on this. This should have been picked up on—somehow, someway. I find this very, very disturbing.

I'm looking for potential solutions, Madam Fraser, perhaps suggestions from you. Are there ways we could address situations such as this one earlier on? Could we identify them differently? Do we maybe need a more robust reporting system incorporated into the annual report of that agent? Do you have additional thoughts on this or any other methods that you could maybe make us aware of?

[Sheila Fraser]

Thank you, Chair.

There are a couple of issues I'd like to address. In this particular case we did not look at the appointment process. My own impression is that it's very difficult for a parliamentary committee to get into issues of character and behaviour. I don't want this necessarily to reflect on this particular individual, but the political level and the parliamentary level have to rely on the validation that is done by bureaucrats.

I would suggest that someone go back and look at the process. Was there anything that was missing in this particular process? Were there 360-degree reviews done, for example? Do people randomly select former employees...not only the references given but other employees? There may be things like this that should be brought into an appointment process. I know in a lot of cases it's actually very rigorous--our neighbours and colleagues, everybody, are all talked to.

Anyway, this might be something the parliamentary committee should consider. What is the process and what is the vetting? How did the person arrive there? Did the person actually apply for this job or not?

Those are maybe the kinds of things that need to be given more precision to parliamentary committees. Quite frankly, I don't think parliamentary committees can get into asking a lot of those questions.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Quite frankly, I sat through the Gwyn Morgan debacle, which was nothing short of embarrassing; there was a character assassination rather than the evaluation of talent. Committees and Parliament weren't served by that, so I hope we won't end up down that path again.

But on another question, Madam Fraser, I do believe we have to consider new oversight mechanisms, because this obviously hasn't worked. Is this an exceptional case? Do we have a system in place and this is an aberration? Or should there be more concrete solid measures in place to tighten up the rules and the parameters of action so we can assure this does not happen again?

[Sheila Fraser]

This is a rather particular situation, because it is dealing with an officer of Parliament. The central agencies--the Treasury Board Secretariat, Privy Council Office, and others--that will do monitoring through government departments and agencies are actually very respectful of the independence of officers of Parliament--and we remind them of our independence quite frequently--so they do not do the kinds of monitoring that may be done for departments and agencies. As Mr. Christopherson mentioned earlier, I will be meeting with my colleagues, the officers of Parliament, in early January, and we will be looking at how we can give better assurance to parliamentarians with regard to how our offices are being managed, the quality of the work we're doing, and whether we are fulfilling our mandates.

I think there's already a lot of information available, but we will need to have, I think, a discussion with parliamentarians regarding how best to give you that assurance. Again, are parliamentary committee meetings the best place for that accountability or is there some other mechanism? We have the panel that was set up for funding; that might be another avenue. I think we have to explore. We have to come up with a proposal, I think, initially, and then discuss it with parliamentarians, as to whether they believe that is satisfactory.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

Obviously, your investigation was very complex, and you went through a huge number of files, as we saw. I'd like Parliament to have an idea of how you substantiated your work, how you determined the allegations of the improper conduct and obviously the reprisal by the commissioner. Give us an example of the work that you would do to substantiate the allegations that you have made in your report.

[Sheila Fraser]

Obviously, we met with the complainants to understand the nature of the allegations that were being made and to get as many details and facts as possible. As we mentioned in the report, we conducted interviews with some 34 current and former employees, so there would have been validating testimony of incidents or things that happened. But we cannot rely upon testimony alone, so we looked at things like e-mails, documents within the office, contemporaneous notes that substantiated the allegations. In the case where there was an allegation of reprisal and an allegation that personal information had been shared with other people, both within the public service and outside, we talked to those people--heads of former employers, a private securities consultant--to validate with them. There was evidence by e-mails as well. There was a fair bit of documentary evidence that supported the...and we had, of course, the interviews with the commissioner on two occasions, one that lasted a day and the second one that lasted two days.

[The Chair, Liberal, Joe Volpe]

Thank you, Madam Fraser.

Mr. D'Amours.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Thank you, Mr. Chair. I would also like to thank the witnesses for being here this morning.

I do not think that we should try to sweep anything under the carpet with respect to government responsibility. It is the government that, through this process, presents one person to parliamentarians. It is the government that makes the final appointment. Consequently, the ultimate responsibility lies with the government.

Mr. Friday, could you tell me two things, the exact date that you started in this position and the title of the position you held.