:
Thank you, Mr. Chairman and members of the committee.
In times of global crisis, the worst and best human behaviours are noticeable. As a result of the declaration of a state of health emergency, the abolition of certain internal control procedures for awarding contracts makes the federal government vulnerable to fraud, corruption, embezzlement, undue influence and, most of all, conflict of interest.
With the introduction of tens of billions of dollars in new federal aid programs, oversight and accountability are becoming unavoidable paradigms. Thus, alternative measures must be put in place to compensate for the revocation of certain internal compliance controls.
While rapid action is needed in times of crisis, maintaining an adequate level of due diligence at the supply chain level is essential to prevent corruption, fraud and other illegal and unethical practices. The reputation of the government and the credibility of the programs depend on it.
First, let's define a conflict of interest.
A conflict of interest may arise in all environments and sometimes irrespectively of the will of a public official. Every person has private interests. Civil servants, however, have a duty to serve the public interest and make decisions using criteria in an impartial manner. If not managed appropriately and left unresolved, a conflict of interest can lead to corruption. As seen from the definition above, in situations of conflict of interest, the private capacity interests of public officials may improperly influence the decision-making process.
There are three different types of conflict of interest. The first one is what we call the actual or, if you prefer, the real conflict of interest. It involves a situation in which an official's private capacity interest is already in conflict with his or her duty to perform in the public interest.
The second one is a potential or a future conflict of interest. It involves a situation in which an official’s private capacity interest does not yet come into conflict with his or her duty to perform in the public interest but may do so in the future.
The third one is an apparent conflict of interest. It involves a situation in which an official’s private capacity interest looks as though it is in conflict with his or her duty to perform in the public interest, although that is not the case.
There are three different types of conflict of interest, so how do we deal with them?
First of all, a duty is imposed on officials to disclose any conflicts of interest and, if directed to do so by their superior or the relevant public sector body, to apply a management strategy such as recusal, removal and even the resignation from duties to mitigate the risk of corruption or loss of trust.
I strongly believe that all laws need teeth to ensure compliance. Whether it is increasing awareness among public office holders of the law and its code or penalizing those who accept to be lobbied when they know they are dealing with a public service holder without authorization, it must be looked at in a way to encourage compliance and discourage any inadvertent or wilful disregard for the laws and codes of ethics.
As I said in my opening remarks, the degree of due diligence should be commensurate with the urgency in which decisions are made, because transparency must prevail and is fundamental in maintaining the public trust in our institutions. Yes, decisions can be made urgently, but we have the mechanisms to transparently review those decisions during or after the fact and hold decision-makers accountable for those decisions. Certainly mistakes may be made; the key is to have mechanisms that allow for urgent decisions to be made, but not at the long-term cost of the reduction of the public trust or good governance.
In public contracts, the most basic caution requires a comprehensive justification and documentation of the decision-making process recommending the award of a non-tender contract. When it comes to awarding a sole-source contract to an entity, it is crucial that some questions are specifically answered. I'm going to give you a list of 15 questions, and they're very important.
Does the entity have impeccable probity?
Does the entity have the technical skills?
Does the entity have the human resources to carry out the mandate properly?
Does the entity have a transparent legal structure?
Does the entity have a stable governance structure?
Does the entity have the financial stability to complete the contract?
Were audits of the entity's officers carried out prior to the awarding of the contract?
Was the contract awarded in an emergency or personal safety context?
Were apparent, potential and actual conflict of interest issues assessed prior to the awarding of the contract?
Is the contract guided by due diligence with respect to the department's interest?
Is the contract typical of the relationship between a department and an entity?
Does the contract include a clause relating to ongoing monitoring of the ethics and compliance program of the entity that is considered to be retained?
Does the contract include anti-corruption clauses?
Does the contract contain clauses for the recovery of embezzled funds?
Was there a legal validation of the contract prior to its being awarded?
In conclusion, I think there are a couple of questions that the committee has to ask itself.
Could the vulnerabilities known at all levels—but particularly in government contracts since the beginning of the pandemic—have been prevented with better pre-pandemic planning?
In other words, are the laws that serve as a framework for the proper management of public funds—to ensure value for money, the absence of conflicts of interest, appropriate lobbying, rules for offers to purchase and so on—suitable for the context of a pandemic or other type of emergency?
Another question the committee should ask is whether the administrators of these laws and the statutes themselves have sufficient resources and teeth to prevent, detect and punish violations of these laws, and in particular conflicts of interest in emergency conditions that require greater transparency and integrity to maintain Canadians' confidence in their institutions. The public has a right to transparency, because taxpayers' money is being spent. The appearance of a conflict of interest is as damaging to public trust as is the actual conflict, in my view.
Again, in my view, there's a direct relationship between the urgency of decision-making in these pandemic situations and a proportionate and high degree of transparency, oversight and consequences for violations of those laws. In this time of a global pandemic, when wrongdoing can lead to reputation-damaging administrative or judicial action, the government must set an example and strengthen its reputation for integrity. The government and senior officials need to be more vigilant and strengthen structures to reduce the risk of favouritism and “clientelism" in awarding contracts.
Although emergency exemptions may be permitted to award sole-source contracts, they must also be necessary and non-selective, as they provide possible bypass routes for deviant actors. Canada has an efficient rules-based procurement system. Therefore, the government and senior officials just have to use it properly and follow the rules.
One last word: Beyond the prevention of fraudulent behaviour through laws or norms that are added to an already existing arsenal, it would be wise to also think about ethics and support programs for individuals in positions of power in order to anchor a truly ethical work culture based on discernment and questioning before making decisions.
Thank you very much. I'm now available to answer any of your questions.
:
Thank you, Mr. Chair; and good morning, everyone. It's good to be back here on the Hill.
Mr. Tassé, thank you for your testimony today. I often like to say and philosophically think about how, in any society in the world, we can ensure that we have a good system of government. What that means is that we have what's called equality of opportunity for all citizens, such that they can pursue their dreams and passions without having any systemic barriers in place, and secondly, that the government has the ability to efficiently deliver products and services to citizens, be it health care or programs that governments are called upon to deliver in extraordinary and unique periods of time, such as the one we're in. That, to me, is how governments are judged; that, to me, is how society is judged; and that, to me, is how society evolves.
In Canada, citizens every day rely upon government for many things in their lives, such as safety. We drop our kids off and want them to be in a safe classroom with good teachers, and we require standards. For me, that goes into a lot of what you do and you speak to in terms of governance, supply chains, credibility, and so forth, so I thank you for your area of expertise and I thank you for your testimony this morning.
I wish to focus my comments on due diligence, because due diligence goes a long way in government and in organizations. That's why we have audit committees in organizations and audit committees in governments, or similar things, and that's why financial statements are audited. It's to ensure integrity.
As to my first question, we heard that as a part of any contribution agreement, for any specific contribution the performance is usually measured at stages throughout the contract, and compensation is awarded and funding continues to flow only if key performance indicators are being met. I'm being very specific here. Obviously we're referring to what we have in front of us. Would you not agree that this is a prudent and responsible approach?
One thing I brought up during the finance discussions from the summertime when I was asking questions was due diligence in terms of asking second and third questions.
I'm a big believer in asking why we are doing something. I tend to ask my kids why they are doing that, and I tend to ask all individuals why they believe that. I ask second and third questions, because I really want to get at, on this level, whether a policy is the proper policy.
I just wanted to make sure. During the testimony, the Clerk of the Privy Council, Mr. Shugart, was asked whether the or his chief of staff asked for WE Charity's financial integrity and ability to administer the program to be scrutinized. The answer from the Clerk of the Privy Council was that the Prime Minister's chief of staff did make the point, which was accepted by everyone, that due diligence and care needed to be exercised with regard to that organization, given the scale of the program.
I think that goes into the due diligence and asking the questions, especially in specifically in this case, that we need to ask to exercise further due diligence.
Aren't those appropriate questions to ask during talks between government and an organization?
:
The testimony has been very helpful thus far. I do want to go back to the issue of credibility. Obviously, in the issues we're reviewing, we have found it very difficult to corroborate different versions of the events that have happened thus far.
As has even been mentioned by Liberal members today, there are things that went wrong. There wasn't enough oversight or there weren't enough protections to ensure that wrongdoing, or at least the perception of wrongdoing, wasn't undertaken.
We had the former finance minister receiving tens of thousands of dollars in luxury vacations from the group to which he not only gave money but to which he was going to give significant amounts more. We know that this group was involved in partisan activity, supporting the minister at fundraisers as well as giving high-quality production assistance to the in terms of his own public perception through production of videos and different things. All of this was done by this group.
Then we had the chair of the group come and say that people who spoke at events weren't paid. We found out later that members of the family had been paid to speak at these events, or to attend corporate elements of these events, which poses a whole other set of problems, if it was, in fact, that they were there to garner support from corporate interests in support of this charity.
We found out that money had flowed through to this organization, and not only to this organization but to an affiliate of this organization that had only recently been created, which was supposed to be there to undertake financial interests for real estate holdings.
There is a lot of confusion, and the credibility of all of the testimony now renders the public left to their own imagination. I believe that more than ever, the need for transparency and release of documentation that would corroborate this evidence is heightened.
I'm not sure if you can give any perspective on what you think should happen with regard to transparency and the release of documentation that would either corroborate or clarify what actually happened.