Procurement and contract fraud is extremely difficult to detect because, in the case of bid rigging, kickbacks, and illegal gratuities for example, it generally involves collusion between parties external to the City. While there has to be a balance between controls and an effective procurement process, it is important that controls are continually evaluated. The Charbonneau Commission currently in progress provides a unique opportunity to do so.
The Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, otherwise known as the Charbonneau Commission, is a public inquiry in Quebec into potential corruption in the management of public construction contracts.
The Commission was enacted in October 2011 with a mandate to:
“1. Examine the existence of schemes and, where appropriate, to paint a portrait of activities involving collusion and corruption in the provision and management of public contracts in the construction industry (including private organizations, government enterprises and municipalities) and to include any links with the financing of political parties.
2. Paint a picture of possible organized crime infiltration in the construction industry.
3. Examine possible solutions and make recommendations establishing measures to identify, reduce and prevent collusion and corruption in awarding and managing public contracts in the construction industry.”
It is anticipated that the final report of the Charbonneau Commission including its recommendations will be available in mid-2015. At the present time, the final cost of the Commission is estimated to be in the range of $35 million.
Even though the Commission is still in progress, there have been significant repercussions as a result of certain information provided to the Commission as follows:
- In May 2013, the former Mayor of Laval was arrested and charged with corruption.
- In November 2013, the Mayor of Montreal resigned as a direct result of revelations made at the Commission.
- In June 2013, the interim Mayor of Montreal resigned after his arrest on criminal charges stemming from activities linked to companies central to the testimony of the Commission.
The proceedings of the Commission even at this point provide an opportunity for the City of Toronto to re-evaluate its procurement practices and, where appropriate, address certain areas. In this context, while the City has an ongoing relationship with the Federal Competition Bureau this relationship needs to be revisited particularly in regards to the referral of individual cases to the Bureau and the investigation process undertaken by the Bureau.