Sunday, June 3, 2007

RCMP pension scandal

I heard part of the questioning of Frizzell and Frizell's testimony as well as that of Macaulay on CPAC this morning. It was quite interesting. This portion copied from another blog is just the tip of the iceberg. Dominic Crupi signed agreement beyond his authority multiple times and it took ages for anyone to stop him. While money was taken from pension funds minutes of the board meeting were actually altered at one point. There were large sums paid to Morneau Sobeco during the changeover. Why there was never ever tendering is left unexplained. The whole affair stinks and as usual it seems that a lot of bigwigs were not helpful to Frizzell.

The questioning focused on Staff Sargeant Mike Frizzell and Chief Superintendent Fraser Macaulay. NDP committee member David Christopherson asks some very pertinent questions during the May 29 meeting:

Mr. David Christopherson: 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 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's 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 and 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. The savings of going with this process as opposed to the grief it was causing them to do it, to me, makes it a negative trade-off. Help me understand.

Why were they willing to go so far, so persistently?

The only reasonable answer is that for the people who went to this effort, the effort was worth it. Worth it how?

S/Sgt Mike Frizzell: Okay. First off, I don't understand either. There's 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 it.

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.

Dominic Crupi was former director of the RCMP's national compensation policy centre. According to earlier testimony, Crupi went to extraordinary lengths to make sure that even when he could no longer personally tender contracts to favoured companies, he could still make sure that the contracts went where he intended them to go:

[RCMP chief financial officer Paul Gauvin] pointed the finger, in particular, at Dominic Crupi, a senior civilian executive with the force who resigned following an internal audit into his actions in 2004.

Crupi's personal authority to sign contracts had already been removed after an earlier investigation, said Gauvin. But he then made an end-run around RCMP rules by going to Consulting and Audit Canada, a federal agency that arranges outside contracts for the government.

"He found somebody there, in terms of collusion, that worked with him," said Gauvin. "A lot of contracts were given out . . . that were not properly tendered and went directly to certain individuals."

That somebody was allegedly Frank Brazeau, a CAC bureaucrat and cousin to former Liberal MP David Smith. A KPMG audit further revealed that at least two of Crupi's contracts went to Brazeau, and from there to Smith's personal company Abotech, and from there to Morneau Sobeco.

But the allegations are that even more effort was taken to make everything seem legitimate:

S/Sgt Mike Frizzell: The final draft of that business case appears to have been done on March 15 of 2002, and it contained an evaluation grid that would make it appear that a proper bid evaluation took place. What this evaluation grid showed was a bid from Great-West Life and a bid from Morneau Sobeco versus keeping it internal. It showed the costings, and son of a gun, Morneau Sobeco won.

When we interviewed the people who were supposed to have been part of that bid, the evaluation committee, they told us that no such process ever took place. This was merely a paper exercise to add legitimacy to the process.

Again, David Christopherson's question looms large. If you are going to go to the effort of faking the bidding process, why not just do it for real? Why all the skullduggery that has led to this miserable situation today?

The obvious reason is that someone was profiting from the doctored process, and so was motivated to make the effort. We don't know who profited, though, because we haven't looked.


Mr. David Christopherson: Are you satisfied that there's no question or no need to investigate whether or not there was any questionable activities, and I'm talking dollars now? Are you satisfied that that is not here?

S/Sgt Mike Frizzell: Not at all, but—

Mr. David Christopherson: 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—

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

S/Sgt Mike Frizzell: We never actually got warrants on bank accounts or anything like that to be able to tell you that.

Mr. David Christopherson: 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.

Mr. David Christopherson: 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.

I think Macaulay is right. Christopherson captures the mood exactly:

Mr. David Christopherson: There hasn't been a meeting yet where we haven't had more questions coming out of the meeting than we had going in.

What are those questions now?

What was the motivation behind all this?
Where did all the added expenses go?
Did anyone profit personally from this?
If so, what did they in turn do with the "extra money" refered to by Christopherson?
And the real question that matters -- if there was money flowing between the major players in this scandal, was there an attempt to use some of that money to build a protective wall around the RCMP by influencing any effort to investigate what was going on in the pension office?

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