Angry in the Great White North

Former Liberal MP David Smith and his firm Abotech, with their ties to the RCMP Pension Scandal, are the focus of Public Accounts Committee attention. Back in 2005, KPMG performed an audit that snagged Abotech's shady dealings:

The 45 contracts reviewed by KPMG were set through Consulting and Audit Canada (CAC), a special government operating agency that procures outside consulting and audit services for federal departments and agencies.

CAC initiated the audit in the summer of 2004 after it found "deficiencies" in some of its files. It soon became clear the RCMP was also investigating contracting irregularities for work contracted by the Mounties' National Compensation Policy Centre through CAC.

At that point, KPMG's retainer for the audit was taken over by the public works department.

KPMG looked into a series of questionable contracting practices under CAC project manager Frank Brazeau, who, on a lawyer's advice, refused to co-operate, while calling the audit "unfair" and "biased."

The Star could not reach Brazeau for comment.

In all, KPMG examined 45 contracts – 31 of which were with the RCMP's pension and insurance division, which went to nine separate companies, and showed a "pattern" of questionable contracting activity, according to the audit. And 30 of those were under the project management of Brazeau.

The audit firm then looked at an additional 14 contracts awarded by Brazeau to other contractors for work not related to the Mounties' National Compensation Policy Centre.

Oddly, the KPMG audit says the RCMP, "as a client organization," declined to share with KPMG the results of the various audits it conducted.

"We have a limited understanding of the activities" at the pension and insurance division – the National Compensation Policy Centre – at the time in question, wrote the auditors.

"Our file review resulted in numerous questions for CAC and RCMP representatives as well as for the contractors and the consultants themselves," it said.

At the parliamentary committee, where the audit was tabled, but not released publicly last week, Conservatives focused on a principal in one of the contracted companies – Abotech Inc. – that received contracts through CAC: former Liberal MP David Smith, who divested himself of his holdings before running for election in June 2004 in Pontiac.

Smith could not be reached for comment last night.

Brazeau worked on Smith's 2004 nomination and election campaign, and was briefly secretary of the Pontiac Liberal riding association.

Brazeau is also Smith's first cousin, and they grew up together in the Quebec town of Maniwaki. As for Smith's divestment of the holdings, he signed the company over to his wife and his two teenage children. The company continued to operate out of the family home, and David Smith continued to sign contracts (inadvertently, he claims). When asked how his wife (a nurse) and his children could operate a firm like Abotech, he said it was simple, as there was no real work, just moving cheques and other paperwork back and forth.

To learn more about Abotech, listen to this two-part CBC Radio One investigation of Abotech that aired December 20 and 21, 2005. The second part focuses on the company and what "services" were provided. It also provides a great summary of the Morneau Sobeco-RCMP-Abotech link.

I've relinked them below:

Part 1 of the CBC Radio One report on Abotech -- Originally aired December 20, 2005 (made available with permission):

Part 2 of the CBC Radio One report on Abotech -- Originally aired December 21, 2005 (made available with permission):

Interestingly, the reference to Abotech's type of services was explicitly compared to the Sponsorship Scandal, and Scott Brison's insistence that Canadians got value for money given to Abotech is challenged. Could the RCMP Pension Scandal get that big, and be as damaging to Stephane Dion's Liberal Party as Adscam was to Paul Martin's Liberal Party?

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