Investigating fraud and conflicts of interest in the public service

At Public Services and Procurement Canada (PSPC), the work of the Special Investigation and Internal Disclosure (SIID) Directorate ranges from looking into suspected fraud and conflict of interest, to investigating suppliers and public servants suspected of attempting to defraud taxpayers in Government of Canada contracts.

Along with suspected fraud on a mega scale, the investigators also probe cases of people attempting to defraud federal benefits payments.

The directorate investigates potential wrongdoing reported through the Public Servants Disclosure Protection Act. The act, also known as the whistleblowing legislation, protects the identity of individuals who disclose suspected misconduct and shields them against reprisal.

The SIID team consists of former Royal Canadian Mounted Police (RCMP) and military police investigators, as well as seasoned specialists in procurement and labour relations at PSPC. The team also has ongoing collaborations with other branches and investigative and detection sectors in PSPC, including the Industrial Security Sector, which oversees and manages security in contracts with the government.

SIID’s investigators are typically assigned cases according to their areas of expertise, but regularly work together as a team and in collaboration with other investigation resources as required. SIID also helps other government departments and police forces, typically the RCMP or other law enforcement organizations, to navigate the intricacies of government procurement.

Investigators’ work is nothing if not varied

“No 2 cases are the same,” said SIID Investigation Manager Réal Benoit, a veteran procurement officer. “But they are all based on human action: did someone do something questionable and if it was wrong, why? People make mistakes, but when you see repetition, you are seeing something that might no longer be a mistake.” Réal added that “it is key that members of the public and employees come forward quickly when they suspect that something went wrong or that someone is defrauding our democratic institutions, as the passage of time will make the investigation difficult and sometimes impossible.”

In this regard, the SIID team confidentially gathers facts from numerous sources, including from members of the public, writes reports and, where appropriate, makes recommendations to prevent reoccurrence, including potential referral to law enforcement partners for their consideration in initiating a criminal investigation. But any corrective action regarding public servants and suppliers is determined and addressed by PSPC management, or in the case of suppliers, by the Acquisitions Branch and the Industrial Security Sector.

Daniel Laurence, a 30-year RCMP veteran, is also a member of the SIID team, who joined just over a year ago. He spent the latter part of his police career investigating drugs and organized crime. Although it’s less dramatic, he considers his work in SIID as critical.

“Most of the time, it’s about looking into and understanding why someone or something went wrong, and what can be put in place to prevent something from happening again,” said Daniel. “We rely on accounts of what employees and members of the public might have observed or heard; everyone has heard stories or seen something that appears to be suspicious. When members of the public become aware of close or personal relationships between government employees and their suppliers that may appear to or actually unfairly influence a federal government contract, this information should be passed on through the Federal Contracting Fraud Tip Line.”

The Federal Contracting Fraud Tip Line, set up to report suspicious activity and suspected fraud in federal government contracts, is an online channel that PSPC jointly operates with the Competition Bureau and the RCMP. SIID is one of the key players in investigating tips related to PSPC.

“The tip line is one way members of the public may participate in preserving our democratic institutions,” Daniel added.

Some cases are more typical than others. For example, SIID conducts a high volume of procurement-related investigations regarding allegations of unethical conduct, conflict of interest or scams. These allegations are sometimes being raised through the tip line, but also by way of industry suppliers’ complaints. COVID-19 has also brought a new breed of suspicious scenarios that appear in various forms. These include unsolicited proposals for goods or services related to COVID-19 by unknown companies and requests for cyber payment through questionable methods.

“Another SIID business line is privacy or commercial information breach. As an example, this would be information shared on a public tender post that shouldn’t have been shared,” added Daniel. “It’s usually unintentional human error or as a result of a gap in processes or policies. So again, our job is to investigate not only what happened, but why it happened, and make recommendations to senior management so we can find better ways to prevent it from happening again and improve our organization for the benefit of all Canadians.”

SIID investigators have also had to be involved in files regarding theft or inappropriate use of government property, mobile and digital scams to commit fraud or other serious breaches to the Code of Conduct, including real or apparent conflicts of interest. A conflict of interest is often indicative of potential criminal activity where SIID could recommend involving law enforcement partners.

Daniel and Réal both agree that avoiding the appearance of conflict of interest is just as important as avoiding a real conflict and that avoiding real or apparent conflict of interest is expected of both employees and suppliers.

“Investigators must go into all cases with an open mind,” said Réal. “Investigating is not just about collecting facts, it’s also understanding people and difficult situations that may affect them. You have to be able to decipher culpable conduct from human error.”

“Most of the time,” Réal added, “we’re just trying to understand why, and how, a person did what they did and what we can do to prevent reoccurrence. This is not to say that there won’t be serious consequences for those who deliberately engaged in unethical conduct, because there will be.”

The public is encouraged to report suspected incidents of cheating or fraud in Government of Canada contracts to the Federal Contracting Fraud Tip Line, and to consult the web page to learn more about what details to include. Federal government contracts are those that are awarded by a federal department or agency. Though all tips are valuable, detailed tips help investigators better understand the context of the complaint and offer them stronger factual leads to pursue. Fraud cannot effectively take place or continue when we shine a light on it, and the public can certainly make a difference in assisting SIID in turning on the switch.

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