Pontiac MP cleared of conflict charge
Smith broke no rules with computer firm, says ethics czar

Jack Aubry, The Ottawa Citizen
Published: Saturday, December 24, 2005

While referring some outstanding issues to the Department of Public Works and a public service agency, ethics commissioner Bernard Shapiro has concluded that Quebec Liberal MP David Smith complied with the code of conduct for MPs in disclosing his past interest in his family's business.

Mr. Shapiro cleared Mr. Smith, who is seeking re-election in the Pontiac riding in West Quebec, of any wrongdoing in connection with allegations that he had broken conflict of interest rules as an MP. However, the investigation has revealed that after Mr. Smith had transferred and sold Abotech Inc., a computer consulting firm, to his wife and two children in 2003, he signed three amendments on behalf of the company with Consulting and Audit Canada (CAC).

He signed the amendments while still a public servant with Public Works, but before being elected as an MP in June 2004.

"The ethics commissioner cannot render findings in relation to the issuance of the sole-source contracts by Consulting and Audit Canada and Abotech Inc. since these events all occurred prior to the member from Pontiac being elected to the House of Commons and before the code came into force on Oct. 4, 2004. The Conflict of Interest Code for Members of the House of Commons does not have a retroactive affect," concluded Mr. Shapiro.

When asked about the contract amendments revealed by Mr. Shapiro's report, Mr. Smith said the matter is beside the point since the complaint is about his conduct as an MP, not a public servant.

"My opponents have multiplied and exaggerated this matter on a continuous basis. I've always been very transparent and I am there for the people of the riding to get to the real issues," said Mr. Smith.

He said he was satisfied with the report and its findings, although he said he wished Mr. Shapiro had finished it sooner.

But Nepean-Carleton Conservative MP Pierre Poilievre, who filed the complaint against Mr. Smith in November, said the report did not clear the MP of wrongdoing, but rather raised new questions about his conduct.

"The report from the ethics commissioner refused to answer existing questions and instead raised new ones," said Mr. Poilievre.

Mr. Shapiro wrote that Mr. Smith sold his interests to his family while still employed as a public servant with Public Works after after seeking advice about "the potential of a conflict of interest issue."

The commissioner said Mr. Smith's signing of contract amendments after the sale raised two issues, including the effectiveness of the transfer of interest is in question from a general policy perspective under the Public Service Values and Ethics Code. Mr. Shapiro said he had informed the Office of Public Service Values and Ethics since "they may wish to address this issue from a general policy perspective."

"The second issue relates to the fact that Mr. Smith signed amendments to contracts as president when he was no longer an officer of the company. Since this information came to light as a consequence of our review of the PWGSC-KPMG audit documents they provided to us, we have informed PWGSC of our observation in order to ensure that they are aware of this fact should it have any relevancy to the followup associated with the audit," said Mr. Smith.

An internal review by the auditing firm KPMG found Abotech was granted about $800,000 worth of contracts between 2001 and 2005 with Frank Brazeau acting as a portfolio director with CAC in the Department of Public Works. Mr. Brazeau has since been suspended without pay for alleged improper handling of contracts and has resigned from Mr. Smith's riding association in August, 2005.

In an interview, Mr. Smith said Mr. Brazeau's grandmother and his mother are sisters.

"When I was looking for work for my firm and I saw that he was at CAC ... I went to see Mr. Brazeau and he explained to me the procedure which I followed on certain bids."

So Pierre Poilievre is not satisified. Good for him -- neither am I.

And we've learned a few new things. The amount of money involved -- $800,000 over 4 years.

Frank Brazeau's role -- "portfolio director".

Had the Ethics Commissioner known that the portfolio director who improperly handled $800,000 in contracts to Abotech was the cousin of the president of the company, a president who in turn was supposed to have resigned but was still signing contracts, would his conclusion have been different?

Hard to say, given that neither David Smith nor Frank Brazeau thought it pertinent to reveal that they were related while under investigation.