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Ministry of Children and Youth Services Investigated

July 22, 2010 permalink

The OPP is investigating three ministries, including the Ministry of Children and Youth Services and the Ministry of Community and Social Services. The investigation seems to relate to expenditure of funds, not to child trafficking.



OPP probing corruption by staff in at least three ministries

Civil servants escorted from buildings in raids and investigation of bid rigging, bribery and corruption on contracts

Police are investigating staff of at least three Ontario government departments including the Ministry of Community and Social Services in a widening corruption scandal.

The ministries of Energy and Infrastructure and Children and Youth services are among the other targets of the Ontario Provincial Police probe that broke open publicly last week with raids on a block of buildings steps from the Legislature, sources told the Star on Monday.

Sources said the government escorted an undisclosed number of employees from the Ministry of Community and Social Services as part of the execution of search and seizure warrants in the vast complex known as the Macdonald block at the corner of Bay and Wellesley. Officers also raided the home of one senior manager in that ministry.

One area of the OPP’s focus is that ministry’s “capital and accommodation services” branch, which is responsible for strategic planning, project management and dealing with the Ministry of Energy and Infrastructure. That ministry includes Ontario Realty Corp., which sells and manages provincial lands and buildings.

Ontario Realty Corp. selected Toronto-based CB Richard Ellis Canada, a major commercial real estate company, to handle all its responsibilities last year. At that time, it inherited several hundred employees working on government contracts.

In March, the Star asked Ontario Realty Corp. about former and current managers allegedly receiving benefits such as home renovations in return for government contracts.

At that time, Ontario Realty spokesperson Bill Moore said those allegations of “suspicious procurement practices” were under investigation. It is unclear whether the current raids have any connection to the earlier probe.

John O’Bryan, vice-chairman of CB Richard Ellis, would not comment on any allegations against company staff that might be subject of the investigation.

Contractors, who regularly deal with the government, have complained to provincial officials during the last two years about competitors gaining unusual favourable attention in winning work.

The OPP has said the ongoing investigation involves “irregular transactions” between government staff and outside contractors but has offered few other details. OPP spokespersons said the force has not arrested or charged anyone yet in the probe.

“We do not want to release any further information at this time because it could jeopardize an ongoing investigation,” said Sgt. Pierre Chamberland.

Despite calls from opposition politicians, government officials would not confirm any suspensions or firings of staff or other information in connection with the probe of alleged bid rigging, kickbacks and fraud.

“The OPP is conducting an investigation that concerns some individuals in the Ontario government,” said Michael Patton, a spokesperson for the Ministry of Government Services. “Since the investigation is ongoing it would be inappropriate to speculate or provide further comment at this time, At the same time, we are fully cooperating in the investigation.”

Other government officials have stressed that no politicians or their aides are under investigation.

At Queen’s Park, opposition politicians pressed Premier Dalton McGuinty’s Liberals for more disclosure on the investigation.

“This is the time for either the premier or one of the ministers to come forward and to reassure the public and those working in the public service who have all been tarred with the same brush about what the realities are,” said Progressive Conservative Leader Tim Hudak.

Hudak said Ontarians don’t know which public departments or agencies are under investigation since the Macdonald block houses offices for 13 ministries The secrecy is also tainting hundreds of public servants and contractors, he noted.

The Tory leader noted there are 13 ministries and agencies — including the Ministry of Energy and Infrastructure and the Ontario Realty Corp., the government’s real estate arm — in the Macdonald Block.

NDP Leader Andrea Horwath said she was troubled by the silence from a Liberal government already under fire for excessive secrecy surrounding questionable regulatory changes before last month’s G20 summit of world leaders.

“This ongoing criminal investigation is extremely disconcerting and casts an unfortunate cloud over all provincial government operations,” she said.

Source: Toronto Star

Addendum: It looks like the investigation is about kickbacks from a carpet cleaning contract. The lion's share of the kickbacks went to the Ministry of Community and Social Services.



Carpet-cleaning contracts behind probe of Ontario ministries

Search warrant shows suspected fraud totalling over $390,000

Carpet-cleaning contracts are behind a criminal investigation at three Ontario government ministries, according to court records, with civil servants accused of accepting kickbacks and rigging bids to line their pockets with cash and electronics.

Premier Dalton McGuinty said last week that three government ministries were under investigation by the Ontario Provincial Police, but did not say why.

Speculation has been rife, but on Tuesday an unsealed portion of an OPP search warrant brought clarity, showing that investigators suspect that taxpayers and two government subcontractors have been defrauded of about $393,000 in the scheme.

The documents state that staff in the Ministries of Transportation, Economic Development and Trade and Community and Social Services are being investigated by the OPP for a scam that was centred on carpet-cleaning contracts.

None of the ministries would comment, other than to say they were co-operating with investigators. Two subcontractors – CB Richard Ellis and SNC Lavalin Profac – are also named in the filing.

Neither the police nor the province has identified the carpet-cleaning company at the centre of the probe. The court document simply refers to the company as a “vendor of record,” which is what the government calls any company that has been awarded a contract after going through the tendering process.

It is also not clear how many employees are being investigated.

“We are aware of the situation and we are co-operating with the OPP on the investigation, but we haven’t had to take any action in response to the situation,” said SNC Lavalin Profac spokesman Gopal Bensal.

No one has been charged in connection with the investigation, which police say centres on irregular financial transactions between government and outside vendors. The court document is a one-page overview of the investigation, which is the only public portion of a sealed court file.

“It is alleged the Ontario government, SCN Lavalin Profac and CB Richard Ellis employees who were involved in the awarding of service work (typically carpet cleaning) to a vendor would accept kickbacks in the form of cash payments, the provision of free personal services and/or the provision of personal electronics,” the document states.

The document says that sometimes, invoices would be issued for work that was never done. In other cases, the contract would be artificially inflated so employees could spread the cash among themselves.

“For smaller jobs that were invoiced at a couple of thousand dollars or less, the vendor provided the suspect employee with 10 to 20 per cent of the invoiced amount,” the document states. “For larger jobs … the vendor provided the suspect employee with approximately 50 per cent of the inflated amount.”

The police are also investigating claims that the civil servants and private contractors would tell the service vendor what other vendors were bidding for a contract, so they could undercut them and win the business and keep the scam going.

“It is alleged that in some instances, kickbacks were provided to the suspect employee for bid rigging in the form of cash payments and/or free personal services,” the document says.

The documents state that the scam cost the Ministry of Community and Social Services at least $300,000, the Ministry of Economic Development and Trade at least $50,000, and the Ministry of Transportation at least $16,000.

SNC Lavalin Profac and CB Richard Ellis were said to have lost approximately $27,000. The two companies provide real estate services to the Ontario government on a contract basis.

A CB Richard Ellis spokesperson said the company has been working with the Ontario government since October, 2009, and would co-operate with the investigation.

“CB Richard Ellis has strong policies regarding ethical behaviour and business practices that all our employees are required to follow,” Margot Friedman said. “We have zero tolerance for illicit or unethical activity in any form. Because the investigation is ongoing, it would be inappropriate to comment further at this time.”

Source: Globe and Mail