CBSA President Erin O’Gorman said she has updated guidelines related to conflicts of interest.Dave Chan /The Globe and Mail
A federal border agency director said he regrets being among a small number of agency officials who accepted an invitation to a virtual whisky tasting organized by primary ArriveCan contractor Kristian Firth.
The public accounts committee, which is holding hearings into the Auditor-General’s February report into the costs of the ArriveCan app for international travellers, heard for the first time Tuesday from Chulaka Ailapperuma, who was involved in technical aspects of the app project, which was launched at the onset of the pandemic.
Mr. Ailapperuma said such events like the April 2021 whisky tasting are not common, but he described ArriveCan as a very intense project and he saw it as an opportunity to socialize with some of his teammates.
“I made an error in judgment,” he said.
He appeared alongside Canada Border Services Agency president Erin O’Gorman, who said she’s been working to reduce the agency’s reliance on consultants and has updated guidelines related to conflicts of interest.
The whisky tasting and other in-person off-site and after-hours meetings between public servants and private contractors are being probed by parliamentary committees as MPs study how the cost of the ArriveCan app grew to $59.5-million. MPs are also studying the broader spike in spending on outside contractors by federal departments in recent years.
MPs have previously heard that Mr. Firth, the managing partner of ArriveCan contractor GCStrategies, had small bottles of whisky delivered to the homes of a few public servants who worked on the project around the time of the one-year anniversary of the app’s launch.
Documents obtained by The Globe show the event was organized by a company called Thirst Responder Mobile Bar, which says on its website that it offers guided online cocktail courses.
The Auditor-General reported that GCStrategies received about $19.1-million to work on the app. The report also said $7.9-million went to Dalian Enterprises, which shares an office and regularly works with another company called Coradix Technology Consulting.
Both GCStrategies and Dalian have said they each have just two employees.
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The Globe reported this week that since Jan. 1, 2011, the three companies have been awarded more than $1-billion in federal contracts for a wide range of issues.
GCStrategies, which was formed in 2015, has been awarded 105 federal government contracts worth a combined value of $100.3-million, while the combination of Dalian, Coradix and joint ventures between Dalian and Coradix were awarded 1,108 contracts worth $914.1-million.
Mr. Ailapperuma said the whisky tasting was attended by Cameron MacDonald and Antonio Utano, who were his superiors at the agency at the time before he was promoted to his current director position.
Mr. MacDonald and Mr. Utano have since been suspended pending the results of an internal border agency investigation.
The agency has previously provided the government operations committee with documents showing invitations to several offsite meetings involving Mr. MacDonald, Mr. Utano and Mr. Firth.
Ms. O’Gorman, the agency president, told MPs in January that such invitations from a private contractor are a concern. Mr. MacDonald and Mr. Utano have asked the Federal Court to intervene and stop the agency’s internal review, which they say is not being conducted in a fair manner.
In February, the two suspended officials told a Commons committee that they believe they are the victims of a widespread cover-up of cost overruns for the ArriveCan app.
The two men said it was their former superior, Minh Doan, who selected GCStrategies to work on ArriveCan.
Chris Spiteri, a lawyer representing Mr. MacDonald and Mr. Utano, said the meetings with Mr. Firth were disclosed and approved by superiors.
“Regarding the hearing today, I suspect that everyone regrets participating in the virtual whisky tasting event and the brief gathering at the restaurant, as they have been manipulated into something they were not,” he said in an e-mail. He said they were social events and no contracting was discussed.
Auditor-General Karen Hogan said her review could not determine who selected GCStrategies, but it found the related contract requisition document was signed by Mr. Utano. She said that “carries with it responsibility and accountability.”
Ms. O’Gorman said Tuesday that she did not have an update on the status of the internal investigation. She said the process will depend on how the Federal Court rules on the matter.
Mr. Ailapperuma said he also attended an after-hours dinner at Joey restaurant in Ottawa’s Glebe neighbourhood that included Mr. Utano, Mr. Firth, Mr. Firth’s business partner Darren Anthony and a GCStrategies subcontractor.
Mr. Ailapperuma said he ate a burger and drank beer and the group discussed personal issues and some technical matters related to ArriveCan, but he said he did not discuss contracting and had no contracting authority at the time. He could not recall the date of the dinner.
Conservative MP Michael Barrett questioned why Mr. Firth and Mr. Anthony would be involved with such a meeting given that the two men have said they do no technical work themselves. Rather, they win contracts and subcontract the work to others and collect commissions of between 15 and 30 per cent of the contract value.
“Their business was drumming up more business. It wasn’t about programming,” Mr. Barrett said.
The Globe reported last year that GCStrategies subcontracted some of its ArriveCan work to multinationals, including BDO and KPMG.
Ms. O’Gorman said the border agency has reduced the number of IT consultants by 68 individuals since February, to 175 from 243.
She also said employees are now required to regularly update their conflict-of-interest declarations. There is also a new requirement for employees to disclose any interactions with contractors outside of the contracting process. “Employees are not to accept gifts from contractors,” she said.
Ms. O’Gorman said federal departments will always have a need for outside contractors, but she said she does question some practices, such as why small companies subcontract large multinational companies to deliver on a contract.
“The value added of these companies is to do that subcontracting, but why a two-person company would subcontract to a multinational, I don’t understand that,” she said.
Mr. Firth said in an e-mail to The Globe Tuesday evening that he cannot comment on why Mr. Ailapperuma “now has regret on his decision to participate in the team building event.”
He said he can provide some context as to why a large multinational may approach smaller firms. “For example, If you are a qualified vendor with an existing contract in the respective department and their deliverables are time sensitive, they may reach out,” he said.