HUMA Committee Report

By refusing to dig deeply into this affair, the Committee is in effect defining the problems at HRDC as purely administrative. The government majority on the Committee is failing in its duty to come up with a far-reaching diagnosis, by ignoring the recurring nature and the political aspect of the serious shortcomings uncovered in HRDC’s management of its grants and contributions programs.

The cases of fraud, the post hoc approvals, the flouting of Treasury Board guidelines, the political pressures, the patronage, the partisan use of public funds, the attempts to camouflage information, the withholding of information, the falsification of documents, the absence of documentation and the influence-peddling are among the issues that should be studied by an independent public inquiry. These issues go beyond the simple administrative aspect to which the government majority on the Committee would like to restrict the report’s conclusions, limiting solutions to breaking up the Department and a series of administrative controls.

Recurrence

For two decades now, the Office of the Auditor General has again and again raised the problem of controls over grants and contributions at HRDC. Many internal audit reports have also flagged serious problems with the management and monitoring of the grants and contributions programs. However, far from being resolved, the problems grew worse. The Committee’s report carefully avoids explaining why nothing was done to rectify the serious breaches of the principles of financial control. The absence of political will on the part of the government and senior public servants to come to grips with these problems is troubling, and the explanation for their inertia is still to come. It is the fruit of incompetence by the responsible ministers who, successively, were not capable of exerting the control that was an inherent part of their responsibilities.

Minimizing administrative problems

Since the internal audit report was made public in January, the attitude of the government majority has consisted in restricting the problems to their administrative aspects. While the Committee report does raise a number of intelligent questions about governance at the Department, its preference for minimizing the crisis has resulted in a superficial diagnosis and in the proposal of solutions for only a small segment of the problems encountered.

Denial of political problems

The government majority has a short memory. Shortly after the general election of 1997, a Liberal Party political organizer was accused and found guilty of influence-peddling after he made use of a list of TJF grant applications to demand political contributions. When he appeared in court, the judge asked if Pierre Corbeil had acted on his own initiative, and the Crown’s response was, "We’ll never know." This was the first of a long list of allegations of fraud, patronage and flouting of Treasury Board rules.

Given the denial of these problems by the government majority, it is impossible for the opposition parties and the public to estimate the true extent of the partisan and fraudulent use of public money. The members of the Public Service in a position to inform parliamentarians and the public were gagged and threatened with penalties if they revealed the abuses and misappropriation of funds they had witnessed. Worse still, witnesses representing departmental officials asserted before the Committee that they had been urged to falsify documents by their superiors.

Camouflage, withholding of information and falsification of documents

To measure the extent of the waste, fraud and misappropriations of funds that occurred at HRDC, the Committee must have all available information. But the government has gone to considerable pains to ensure that it did not have that information. The opposition obtained a list of TJF contributions under access to information in which were found a number of grants approved after payment. The Minister, for her part, published an expurgated list in which payment dates had been entirely removed.

In response to demands from the opposition parties and the media about specific cases, the Minister referred them to her officials for the answers. But the officials could not answer because of a departmental directive telling them to refer any questions to the Minister’s office. Then, changing tactics, the government turned down all demands for information, referring the media and parliamentarians to the Access to Information Act. The Access to Information Commissioner has severely criticized the government for its many failures to comply with the Act.

In the same way, the dismantling of the mega-database on Canadians is far from restoring public confidence in the Department. Only an in-depth revision of the Privacy Act, using the one in Quebec as its model and prohibiting the compiling of such databases, would reassure the public that such a practice would never happen again at HRDC or any other department.

Conclusion

The administrative and political mess at HRDC is a real nightmare on a number of counts: the public funds at issue are huge and the existence of the whole package of government grants and contributions programs is compromised; the public’s confidence in government, parliamentary and public service institutions has been severely shaken; and a feeling of complacency about partisan and fraudulent use of public money, accompanied by a feeling of impunity, has spread and could spread still further.

Any division of the Department will have to be preceded by the resignation of the Minister and the appointment of a new Minister with a one-year mandate to carry out the break-up.

In our political system, the government is responsible to Parliament for the use it makes of the public money entrusted to it. The irresponsible attitude of the present Minister and her predecessor in the face of a crisis like this one guarantees that abuse and negligence will continue if the government’s actions are limited to the recommendations of the Liberal majority in this report.

Given the scale of the crisis at the administrative, political and criminal levels, and given the government’s desire to smother the whole affair, the opposition parties agree that only an independent public inquiry will make it possible to truly measure the scope of the administrative weaknesses and the misuse of public funds.

To make sure that such an inquiry is effective, members of the Public Service must be able to count on a mechanism ensuring them immunity for whistle blowing in cases of abuse and fraud. Legislation to this effect should be passed by the House of Commons as rapidly as possible.