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The Abotech Affair: Questions reported in the Ottawa Citizen

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The problems for David Smith continue to grow. An issue first raised on this blog is now gaining some national notice.

As you might recall, David Smith is the Liberal MP representing the riding of Pontiac in Quebec. He once ran a computer consulting firm called Abotech out of his home, but when he was elected to Parliament in June 2004, he transfered ownership and control of the firm to his wife, Anne Ethier, a nurse.

Abotech has been targeted by a KPMG audit at Public Works. The recipient of over a million dollars in government contracts over the last five years, Abotech has seen some contracts summarily terminated.

Why? The government insists that it was over the way the contracts were awarded, and not because of any problems with the way Abotech did the work. In any case, David Smith insists he doesn't know what is going on in the company, even about the terminated contracts.

David Smith is now under formal investigation by the Ethics Commissioner.

Among the questions raised in this blog, and there were many questions raised: Just how legitimate is David Smith's assertion that he is an aboriginal?

Abotech is listed in the government's Aboriginal Business Directory, making it eligible for contract set-asides, that is, work protected from the standard open bidding process and specifically available for aboriginal businesses only. The only person punished so far in this case (that we know about) is a bureaucrat for Consulting and Audit Canada (a part of PWGSC, recently disbanded). Frank Brazeau, interestingly enough, was charged with reporting on CAC's progress on meeting aboriginal set-aside targets.

Frank Brazeau worked with David Smith as secretary for the local Liberal Party riding association.

Sources in the Maniwaki community have also made the claim that Frank Brazeau and David Smith are cousins.

So is part of the mysterious problems revealed by the KPMG audit related to aboriginal set-asides? Did David Smith and Abotech somehow profit from David Smith's political and family relationship with Frank Brazeau?

But is Abotech even an aboriginal firm? Just how legitimate is David Smith's claim? You can read my investigation on this topic, but now the same questions are being raised by the NDP candidate for Pontiac, Celine Brault. And the issue has hit the pages of the Ottawa Citizen.




From page A6 of the December 5 edition of the Ottawa Citizen, an article by Kate Jaimet:

A Liberal candidate, who registered his former business in a federal program that gives favourable treatment to native companies, is coming under criticism from his NDP rival, who says she doubts he’s really an aboriginal.

Celine Brault, the NDP candidate in the Quebec riding of Pontiac, said Liberal incumbent MP David Smith’s claim to be aboriginal sounds “far-fetched.”

Ms. Brault based her doubts on an article in a community newspaper, in which the chief of the Kitigan Zibi reserve, which is adjacent to the farm where Mr. Smith grew up, stated Mr. Smith is not part of his band.

“He is not a native. He’s never been registered with our band. As far as being a status Indian according to the Indian Act, he is not,” Chief Jean-Guy Whiteduck said in an interview.

But Mr. Smith defended his claim to being aboriginal, saying his maternal great-grandmother was native.

“I’m a Metis,” he said. “I’m a member of l’Alliance Autochtone du Quebec. I’m a member of the Congress of Aboriginal People of Canada. But again, that is a private thing.”

The question of Mr. Smith’s aboriginal identity arose as part of a larger controversy over government contracts awarded to Abotech, a company Mr. Smith founded in 2000.

Mr. Smith, who was an entrepreneur before entering politics, said he founded a numbered company in 1996. In 2000, the company, renamed Abotech, bought part-ownership of a small software firm and began looking for government contracts.

The federal government has a policy of offering certain contracts, called “setasides,” exclusively to aboriginal companies. Mr. Smith said he registered Abotech as an aboriginal company and hoped to win some of these contracts.

“We heard of this set-aside program for aboriginal firms. That’s where we signed up. We did it through all different government organizations,” Mr. Smith told the Citizen last week. “We completed the forms. And they asked the proofs (of aboriginal ownership) and they accepted it, after review.”

Mr. Smith said that in the end, Abotech did not benefit in any way from being registered as an aboriginal company.

“There was no contracts that were given (to Abotech) on the set-aside program ... It didn’t get any advantages. None,” he said.

But some contracts granted to Abotech have raised questions.

An internal review by the auditing firm KPMG found Abotech was granted about $1 million worth of contracts between 2001 and 2005 by Frank Brazeau, a contracting officer with Consulting and Audit Canada in the Department of Public Works. Mr. Brazeau has since been suspended without pay for alleged improper handling of contracts.

Mr. Smith said he knew Mr. Brazeau, because they grew up in the same small town.

Mr. Smith declined to say how close their friendship was, and said if there was any improper handling of contracts, he wasn’t involved.

“I respected the procedures. If there was some things which were done in non-conformity, me, I don’t know,” said Mr. Smith, who sold Abotech to his wife and two teenage children, in order to avoid conflicts of interest, when he got a job with Public Works at the end of 2003.

Mr. Smith became the Liberal candidate for Pontiac in 2004, and won the seat.

The connection between Mr. Smith, Mr. Brazeau, and the government contracts granted to Abotech is the subject of an investigation by ethics commissioner Bernard Shapiro, instigated at the request of Conservative MP Pierre Poilievre.

The investigation does not touch on Mr. Smith’s aboriginal identity.

Ms. Brault said she also looks forward to “urgent clarification,” both of the aboriginal question, and the government contracts.

“I’m not saying it’s not a legitimate thing for him to claim aboriginal status through his great-grandmother,” Ms. Brault said. “I’m just saying that the details surrounding this and the comments being made by the chief of the aboriginal community lead us to believe that this is not quite as clean and as ethical as it should be.”

The community newspaper that piqued Brault's interest was the West Quebec Post. The lead article for the November 25 edition was a joint effort by this blogger and reporter Julie Murray.

David Smith insists that no set-asides were awarded to Abotech. That might be true, in which case the question of why Abotech is being punished is still open.

But the question of his aboriginal status, which in this blog was reported as something that happened after David Smith graduated high school, and probably before April 2001, when his company underwent the formal name change to "Abotech", is now a local election issue with some national notice.

Whether David Smith profited or not, a tenuous or ilegitimate claim will seem dishonest and self-serving to many people, an act that can only hurt the efforts of legitimate aboriginals trying to succeed in business or in government.

We'll see how it plays over the next few weeks in Pontiac.


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Comments

Interesting if the Torys could get a win in Quebec. (although I strongly doubt it)

What the hell are my follow voters in Ontario thinking? G&M says Liberals up in Ontario. Argh! And this after a "good" week for Harper. What is going to happen after the new year and the Liberals are dropping bomds on the CPC? I am starting to worry that Liberals are going to win this thing.

Posted by: Spencer at December 5, 2005 01:40 PM



Take a breath, its going to be a long haul! This is one of the best laid out game plans in an election I have watched in awhile. Mr. Harper is being very smart and getting the party policy out there. Whom ever is running the strategy for him deserves a pat on the back. The Liberals and Bloc are fighting within Quebec, NDP is not sure whom their fighting and the Conservatives are just rolling along. Remember, people are getting very sick of polls, and alot of people are becoming aware of how bias the media real is. Keep the faith!

Posted by: Mary at December 5, 2005 11:29 PM



The article cites a claim about Mr. Smith's "maternal grandmother" being Aboriginal. Which implies that his maternal grandmother married a non-Aboriginal. And, further, the implication is that his mother married a non-Aboriginal (else he would have stronger ties to his claim, which he would presumably cite). Which, as I understand the two-generation rule, means that he is not considered an Aboriginal (although I do not know when this rule came into effect). Certainly, his children would appear to have no legal claim to Status unless his wife is considered Aboriginal.

And even if his claim to Status were solid, since he is no longer involved with the company in any way, and there appear to be no claims that his wife is Aboriginal, how does Abotech still qualify to be considered an Aboriginal company?

Posted by: Paul O at December 6, 2005 03:04 AM