Senate sole-sourced contracts to Deloitte, says ‘competitive process set aside for services of confidential nature’

PARLIAMENT HILL—Two auditing contracts that a Conservative-dominated Senate committee authorized for forensic investigations of Senate expense claims by Senator Mike Duffy, two other former Conservative Senators, and a former Liberal Senator were awarded without competitive bidding to a firm that has been the official auditor of the Conservative Party since it was formed a decade ago, The Hill Times has learned.

The accounting firm Deloitte, also one of the mainstream accounting firms routinely retained by government departments through the years, began the Senate expense audits last January and had received a total of $518,842 by the end of last September as the original value of each contract mushroomed through successive amendments.

Although the Senate routinely awards sole-source contracts under contracting policies the Senate says are not public documents, Deloitte’s role in the expense investigations has taken on new significance following the disclosure of RCMP evidence that shows Conservative Sen. Irving Gerstein, chair of the Conservative Fund Canada, attempted to interfere in the audit of Sen. Duffy’s expenses at the request of former PMO chief of staff Nigel Wright.

Evidence an RCMP investigator filed in court last week also shows that Sen. Gerstein, who also has ultimate control over Conservative party spending, was at one point willing to authorize withdrawal of up to $32,000 from party coffers to pay off some of Sen. Duffy’s impugned expenses as the scandal grew last February, but balked when he learned the actual cost to repay all of Sen. Duffy’s housing and per diem expenses would be just over $90,000.

Mr. Wright, who later resigned from his post as Prime Minister Stephen Harper’s (Calgary Southwest, Alta.) chief of staff because of his actions, in effect repaid Sen. Duffy’s expenses himself by reimbursing Sen. Duffy the full amount through a CIBC bank draft the same day Sen. Duffy used his own cheque and an RBC credit line to repay the Senate.

Three Deloitte accountants who took part in the review of Sen. Duffy’s expenses have been called to appear at a meeting of the Senate Internal Economy Committee on Thursday to testify about an attempt by Sen. Gerstein to find out whether Deloitte would drop its review of Sen. Duffy’s expenses if Sen. Duffy acknowledged he had misinterpreted Senate expense policy and repaid his expenses before the Deloitte review came to any conclusions. The meeting is going to be in-camera.

Although a Deloitte partner whom Sen. Gerstein contacted came back with the news that the Deloitte accountants would continue on regardless of whether Sen. Duffy repaid his expenses, Sen. Gerstein learned that Deloitte would be unable to rule on Sen. Duffy’s principal and temporary residency claims—at the centre of his expense problems—unless the auditor obtained more detailed information from Sen. Duffy.

RCMP evidence, in the form of excerpts of emails between Mr. Wright and a half-dozen Senators and PMO aides involved in the scheme to settle Sen. Duffy’s expenses, shows that Mr. Wright and other PMO aides ensure Sen. Duffy and his lawyer did not have direct contact with Deloitte auditors before they issued their final report.

The Senate communications office confirmed that the two contracts to Deloitte were awarded without tenders because the firm was available to complete the work in a “relatively” short deadline.

“The Deloitte contracts were sole source,” Senate communications officer Annie Joannette told The Hill Times in an email.

“The policy contains an exception which allows that the competitive process be set aside for services of a confidential nature, where the disclosure could reasonably be expected to compromise Parliamentary or government confidences,” she said.

“Other reputable consulting firms were considered and Deloitte was selected because they were available to complete the work within a relatively tight deadline,” Ms. Joannette said.

Although Ms. Joannette said the Senate administration selected Deloitte for the expense investigation, Conservative Sen. Claude Carignan, the leader of the government in the Senate, told The Hill Times that the Internal Economy Committee was in charge.

“The Senators did not advise the Senate administration on this matter,” Ms. Joannette said. “The firm was selected by the Senate administration.”

Asked which Senate policy allowed for the sole-source contracts, Ms. Joannette replied: “The procurement policy is not a public document at this time.”

Ms. Joannette later elaborated, saying the Senate administration decision to select Deloitte was approved by the Senate’s Internal Economy Committee.

NDP Leader Thomas Mulcair (Outremont, Que.) and Liberal Leader Justin Trudeau (Papineau, Que.) pressed Mr. Harper about Sen. Gerstein’s contact with Deloitte during its Senate expense reviews.

“The RCMP said Irving Gerstein called Deloitte twice to interfere with its audit of Mike Duffy’s expenses, he tried to back channel audit information and then pressed on hoping that Nigel Wright’s $90,000 payment would make that audit go away,” said Mr. Trudeau.

Mr. Mulcair focused on the fact that Sen. Gerstein was ready to use $32,000 in party funds to pay off Sen. Duffy’s expenses, but declined when the amount turned out to be much higher.

“What is the ethical difference between a $90,000 cheque from Nigel Wright and a $32,000 cheque from the Conservative Party?” Mr. Mulcair asked Mr. Harper.

“Here’s a hint, the answer is not $58,000,” Mr. Mulcair said.

Mr. Harper reiterated his position that only Mr. Wright and Sen. Duffy are under RCMP investigation, and argued that the RCMP evidence shows he was unaware of the plan Mr. Wright had concocted.

Original Article
Source: hilltimes.com
Author: TIM NAUMETZ