Auditor general’s office fires two workers who made extra cash with federal contracts

OTTAWA — Prime Minister Justin Trudeau has signalled that his Liberal government is rethinking how it evaluates and accepts proposals for work following the recent firing of two public servants who were making side money from federal contracts. 

The office of Canada’s auditor general said on Wednesday that it had fired two employees and investigating a third after discovering they were earning money through federal contracts and had failed to disclose that to their managers.

Karen Hogan’s office isn’t providing details about the contracts or what departments issued them, only saying they weren’t with the auditor’s office. 

The National Post first reported the story.

“We have seen procurement processes and contract processes within the public service are sometimes unacceptable,” Trudeau said Wednesday in Calgary.

“That’s why we have launched investigations and are rethinking how the public service does procurement and does contracting.”

Trudeau said Canadians have a right to expect that governments — at the political level and non-political level — “are responsible and efficient stewards of taxpayer dollars.”

“And that’s why we are taking this so seriously,” he said. 

The auditor’s office said it had initiated an internal investigation of the workers in June of last year and concluded one case in September and the other in December. 

“Based on the results of the investigations, the OAG revoked the individual’s security clearance and terminated employment. OAG employees are required to have a valid security clearance,” said Natasha Leduc, spokeswoman for the auditor general’s office, in a statement.

Those two cases were referred to the RCMP in January, and Mounties advised the auditor general’s office to bring them to Ottawa police the following month. 

The Ottawa Police Service didn’t respond to a request for comment. 

Hogan’s office said the two cases are separate and neither individual was an auditor or a manager.

“Additional values and ethics training will be rolled out to all OAG employees in coming months, and additional controls are being implemented to verify outside employment or contracts,” Leduc said. 

The revelation comes weeks after the Department of National Defence launched an investigation into one of its employees, David Yeo, who is a founder of Dalian Enterprises Inc., which has done past work for the government of Canada, including on the ArriveCan app. 

A spokesperson for the company has since defended its integrity and asserts steps were taken to address conflict-of-interest concerns related to its founder, who went to work for the Department of National Defence in September. 

Dalian Enterprises Inc. said Yeo made the appropriate conflict-of-interest filing, resigned as a director and officer and put his company shares in a blind trust because its main customer is the government of Canada.

The government’s directive on conflict of interest states that public service employees should refrain from having private interests and engaging in outside employment that may impair their ability to be objective and impartial.

“Employees must advise their deputy head of outside employment and activities that could result in a real or perceived conflict of interest,” said Martin Potvin, spokesperson for the Treasury Board of Canada Secretariat in a statement last week. 

“The directive also requires employees to seek approval from their deputy head before entering into a contractual arrangement with the Government of Canada for which they are receiving any direct or indirect benefit or income.”

Anyone employed in the federal public service who has not complied with the requirements could be fired. 

The Treasury Board of Canada Secretariat said it does not have centralized records on the number of Government of Canada employees that are engaged in outside employment.

This report by The Canadian Press was first published March 13, 2024. 

Mickey Djuric, The Canadian Press