Evidence of meeting #140 for Public Accounts in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ouimet.
A video is available from Parliament.
As an Individual
Based on your statement, I will take it at face value.
I would only comment that once we got into the special committee process, I actually flagged for the board and management the issue of Mr. Vandenberg and asked that he be removed, but he was not removed at that time.
Conservative
Michael Cooper Conservative St. Albert—Edmonton, AB
Again, there were conflicts of interest, money improperly going out the door and reliance, supposedly in good faith, on counsel who was in a blatant conflict of interest and in blatant contravention of the SDTC act. It's just unbelievable that you can come here with a straight face and defend the practices of SDTC and its board in the face of that.
Mr. Kukucha, speaking of law-breaking at SDTC, which you were complicit in, Mr. Vandenberg was part of a two-member council that, under the act, is required to have 15 members and requires five members to achieve quorum, yet this two-person council appointed five directors to the SDTC board. They were all unlawful appointments.
How do you explain that?
As an Individual
Honourable member, when I joined the board, this system had been in place and operational for many years. I flagged, and the board had discussions—
Conservative
Michael Cooper Conservative St. Albert—Edmonton, AB
In fact, the Auditor General, in her damning report, which you won't even concede to or accept, said the board you sat on was complicit in this illegal activity. The board supported the law-breaking. Isn't it part of a culture of corruption, self-dealing and law-breaking? Isn't that what was going on?
I would say to you, Mr. Kukucha, that it raises serious questions about why the board would have been complicit in having an unlawful, two-member council. It was all about making sure that Liberal insiders and cronies of board members were appointed as directors so they could get a piece of the action to pad their pockets in a corrupt racket that makes the sponsorship scandal look small by comparison. That's what happened.
Conservative
As an Individual
Honourable member, I can only speak to my own conduct. There was no corruption that I directly saw, was aware of or participated in. Errors were made—we acknowledge those. I did accept the results of the Auditor General's report and, candidly, I did flag for the board the issues with both the members' council and Mr. Vandenberg, but they were not acted upon. As a new member to the board, all I could do was to do my best to raise issues, see if they were dealt with and try to move the organization forward in a positive way. However, I concede that errors were made, for sure.
Conservative
The Chair Conservative John Williamson
Thank you very much. That is the time.
Mr. Erskine-Smith, you have the floor for five minutes, please.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
Thanks very much.
I'll stay with you, Mr. Kukucha. You mentioned that you flagged a concern with Mr. Vandenberg or his involvement and his role. I'm just trying to work out a timeline—I'm new to this committee. When did that take place?
As an Individual
That took place during a discussion related to the special committee, later in 2023. I don't know the specific timing, but it was flagged and no action was taken.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
Again, just so I'm clear on the timeline here, you received the whistle-blower call in January—
September 23rd, 2024 / 12:20 p.m.
Conservative
The Chair Conservative John Williamson
I'm sorry, Mr. Erskine-Smith, but just give me 10 seconds. I'm going to give you your time back.
Just to follow up on the request, we have two individuals now, a member and a witness, who are having a back-and-forth. We can have only one microphone open at a time. This is true even when it's on the floor here. While Mr. Erskine-Smith's microphone is open, I ask the witnesses to be sure they're muted. Then, when the member is done, take a second or two, and then it's over to the witness.
It's back to you, Mr. Erskine-Smith. I paused the clock. You have just over four and a half minutes.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
I appreciate it—we'll dance with the microphones.
To go back to the timeline, in January 2023 you received the whistle-blower's call. I expect we'll get a transcript of that at some point, although you or SDTC staff will have only a partial one. The board initiated a special committee, which then came back with a report from a law firm in May 2023. Just so I'm clear, was that Vandenberg's law firm?
As an Individual
Yes, it was. To be clear, that was ultimately a mistake. We should not have hired them, in the sense that Mr. Vandenberg was on the members' council. We were very much focused on moving an investigation forward quickly. That recommendation came forward, and the committee and management were very supportive of that. In hindsight, it was a poor decision, so I absolutely concede to that.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
I understand. I appreciate that.
What did that report tell you? Did the law firm flag the same concerns that we then saw through the Auditor General's report, or where did it differ?
As an Individual
I am looking at my notes for that investigation. Neither we nor the lawyers had all the information from the dossier, which we had requested from the whistle-blower. That report did a series of investigations and interviews with employees based on the allegations we had from the one-hour phone call, including an extensive document search. It did not find any systemic issues but, then, I do not believe we had all the facts available to us and to the government in the dossier.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
Obviously, though, there was enough concern in that hour-long phone call that you brought it to the board and a special committee was initiated. What was, in your view, the most damning allegation that the whistle-blower brought forward in the course of that phone call?
As an Individual
There were baskets of allegations, including misappropriation and misuse of funds, HR allegations.... They were all serious enough to be looked at, but any time there was an allegation about misappropriation of government funds, that was absolutely the one I took most seriously. Well, I took them all seriously, but—
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
I understand.
When it comes to misappropriation of funds, I think it's useful to separate it from the HR concerns. I've read the AG's report. I've read the Ethics Commissioner's reports, specifically the Verschuren report. The Ethics Commissioner does find that there are two violations there: one, abstentions should have been recusals; and two, the blanket approval of COVID relief was improper, and there should have been a recusal there as well. Also, there was an improper furthering of a private interest in that case.
I didn't see any allegations or concerns of misappropriating funds. Were the whistle-blowers' concerns in that regard more specific? Have we not seen them studied by the AG and by the Ethics Commissioner in the same way?
As an Individual
There was no specificity to the whistle-blower's accusations around misappropriation of funds.
As I said earlier, the AG's report stands on its own with regard to its details and findings.
Liberal
Nathaniel Erskine-Smith Liberal Beaches—East York, ON
My last question is in relation to the COVID payments, which I think Mr. Cooper overstated. However, my understanding from the AG report is that it's 63 approvals in a bundle for about $12 million—regardless, a significant sum of public funds. We have one case where the Ethics Commissioner has now found that there was an improper furtherance of a private interest, because the chair did not recuse herself—as she said she would, actually, when she was first put in that position.
Regardless, what was the legal advice? I've heard that different legal advice has been provided, and so people weren't recusing themselves at that time. What in the world was the lawyer telling you, that a recusal wasn't necessary? What was the legal rationale?
As an Individual
The legal advice was that because we had previously declared conflicts, and this was funding that was being provided in a basket to management to use at their discretion to top up if there were financial concerns, we did not have to recuse ourselves again if we had previously declared that conflict.
Conservative
The Chair Conservative John Williamson
Thanks very much. That is the time.
Beginning our third round, Mr. Cooper, you have the floor for five minutes.
Conservative
Michael Cooper Conservative St. Albert—Edmonton, AB
Thank you, Mr. Chair.
Mr. Kukucha, you said that as a member of the board you didn't even bother to read the enabling legislation, which would have taken all of 15 minutes. Did you take the time to read the contribution agreements with ISED?