Public Works under cloud over contracts
RCMP probe conflict-of-interest allegations after senior bureaucrat in charge of Ottawa's massive real-estate portfolio leaves post.
The senior bureaucrat in charge of Ottawa's massive real-estate portfolio left his job after allegations that he engaged in favouritism and was in a conflict of interest with one of his suppliers, sources say.
Public Works and Government Services Canada has confirmed that it called in the RCMP and hired the auditing firm KPMG to review contracts at the centre of the complaint.
Government and private-sector sources said the concerns surround the relationship between Tim McGrath, the former assistant deputy minister of real property at Public Works, and Brian Card, the president of an Ottawa-based firm called the Corporate Research Group (CRG).
Over the past three years, CRG has received $24-million in federal contracts, including $21-million from Public Works for consulting on real estate and other matters.
According to the government, the investigation started with a complaint, filed under Ottawa's whistleblower legislation, that a senior civil servant engaged in favouritism toward a company and was in a conflict of interest. The complaint was deemed to be “founded,” and the employee left the government after “disciplinary measures were invoked,” Public Works said.
The Globe and Mail reported late last year that an internal investigation had taken place. After refusing to say whether the police had been called in, Public Works acknowledged on Friday that it had asked the RCMP to “review the case” last fall.
“Where the findings of an investigation suggest potential criminal activity, the standard practice is to immediately refer the case to the RCMP,” the department said.
In addition, Public Works has hired KPMG to conduct a review of contracts awarded to CRG. Public Works said that it “still has ongoing business relations with the firm.”
“If the current review finds any wrongdoing on the part of the concerned firm, the required steps will be taken,” spokeswoman France Langlois said.
According to an e-mail to The Globe from Public Works, the internal investigation concluded there was “an inappropriate personal relation” in the case.
While the government is refusing to expand on those findings, sources who have been briefed said that investigators were concerned by the frequency of the contacts and an apparent friendship between the two men.
Public Works manages the Canadian government's multibillion-dollar real estate portfolio, and is constantly seeking new buildings to house bureaucrats, or better deals on leases. The Corporate Research Group was frequently hired to provide expert advice to Public Works on managing its real estate assets, for example, to help the department negotiate a lease.
Mr. Card also had private sector clients, including at least one real estate firm that wanted to do business with Public Works.
Documents show that in recent years, Mr. Card intervened with Mr. McGrath on behalf of Busac Real Estate, which sought to negotiate a long-term lease with Public Works on a federal building called the Louis-St-Laurent in Gatineau, Que.
In an e-mail of June 5, 2008, the president of Busac complained to Mr. Card about the pace of the negotiations related to a building that houses Defence Ministry officials.
Mr. Card forwarded the e-mail to Mr. McGrath's personal e-mail address, asking the senior bureaucrat for advice.
“Any direction would be helpful,” Mr. Card wrote to Mr. McGrath.
In an interview, Busac president Michel Couillard said that his company hired the Corporate Research Group a few years ago to find investment opportunities in the National Capital Region. Mr. Couillard said when Busac got involved in negotiations involving the Louis-St-Laurent building, he received Mr. Card's help to set up meetings with Mr. McGrath and others.
“For us and many businesses looking to do business with Public Works, it's not easy. It is a hard world to understand and to navigate through,” Mr. Couillard said.
“Obviously, if someone is there and understands the machine and how it works, and can provide some advice, all the best. But that's all it is,” he said.
Mr. Couillard said that Mr. Card handled his dealings with the government carefully.
“Mr. Card, in the Louis-St-Laurent file and others, always kept a distance with the government … saying he didn't want to get too involved with Public Works, given he had fairly big contracts with them,” Mr. Couillard said.
Mr. Card did not respond to requests for comment. Mr. McGrath said he left the public service on his own and was not asked to leave. “If any matter concerning me has been referred to the RCMP I am not aware,” he said in an e-mail.
On its website last December, Public Works acknowledged the internal investigation without naming the public servant. “Disciplinary measures were invoked and the employee is no longer employed by PWGSC,” the statement said.
At the time, Ottawa refused to confirm that it had called in the RCMP, which it did in October. Mr. McGrath's departure was announced internally in September by Public Works' deputy minister, François Guimont.
“Over the last few days, Mr. Tim McGrath provided me with his resignation. I have accepted his request and I wish to thank him for his years of service to the Government of Canada,” Mr. Guimont wrote.
