Proceedings of the Standing Committee on
Rules, Procedures and the Rights of Parliament
Issue 2 - Evidence - May 17, 2016
OTTAWA, Tuesday, May 17, 2016
The Standing Committee on Rules, Procedures and the Rights of Parliament met this day at 9:31 a.m. for the consideration of the case of privilege relating to the leaks of the Auditor General's report on the audit of the Senate.
Senator Joan Fraser (Chair) in the chair.
The Chair: Thank you all for making it to what is not our normal meeting room. We thought it would be a little easier to have the meeting in this room, because it's a bit bigger and less cramped than the one in which we normally meet.
We are very pleased to have with us today the Auditor General of Canada, Mr. Michael Ferguson, and members of his staff, namely Susan Gomez, Director; Clyde MacLellan, Assistant Auditor General of Canada; and Jean-Charles Parisé, Principal. They are here, as you know, in light of the question of privilege submitted by former Senator Hervieux-Payette about leaks of the Auditor General's report a year ago, and the ruling by two Speakers that there was a prima facie case of privilege.
We have heard from Senator Hervieux-Payette, and now we have invited the Auditor General to be with us. As you know, he did write a letter to us, in addition to the remarks that he's going to make now.
So we will ask him to make an opening statement. The floor is yours, sir.
Michael Ferguson, Auditor General of Canada, Office of the Auditor General of Canada: Madam Chair and honourable senators, thank you for inviting me today to take part in the committee's study of the leaks of audit information and excerpts of my office's report on the audit of senators' expenses.
[Translation]
I would like to begin by emphasizing to senators that protecting the confidentiality of the information we collect over the course of an audit, as well as that of our reports until they are tabled, is a matter of significant importance to our office.
My office follows a set of established precautions for all of the audits we undertake in order to safeguard against the public release of audit information before our reports are tabled. These precautions are spelled out in our security policies, guidelines and audit manuals, and our employees and contractors are reminded of them regularly, as well as at the outset of every audit.
[English]
Madam Chair, the details of the safeguards in place for all of our audits are outlined in the letter we sent to the committee on April 6. This letter was issued in response to the committee's questions about the way we manage and safeguard information throughout our audits. We are keenly aware of the sensitivity of the audit of senators' expenses.
For this reason, in addition to our established precautions, we implemented enhanced information management and security measures specifically for this audit. For example, to protect the privacy of individual senators, we implemented a numbered coding system, instead of using people's names, to refer to our files. Any hard copy files we received from senators were kept at the Chambers Building at 40 Elgin Street. We also added security measures at the Chambers Building, including installing card readers to monitor access, motion detectors and alarms, and by requiring that computers and papers be stored in locked cabinets at the end of each work day.
All staff assigned to the audit of senators' expenses received specific training on security. At the beginning of the audit, the office's security team presented two awareness sessions on security to the audit team. These sessions covered the team's responsibilities relating to information management, access to information and privacy. Reminders of the need for added vigilance were provided to staff throughout the audit.
[Translation]
Madam Chair, audit information is shared with those we audit in order to validate facts and present our observations. At the beginning of each audit, we require that persons with overall responsibility for the subject matter of the audit maintain the confidentiality of all our protected and controlled documents. In the audit of senators' expenses, we asked that each senator sign a similar letter committing to not disclose audit information until the report was made public.
In the period leading up to the publication of the report, additional measures were put in place to restrict and monitor access to the report's content. Access was limited to those employees with a direct business need, and any access to content was logged. On June 4, 2015, we hand-delivered 12 hard copies of our final report to the Speaker's office.
Despite the measures outlined above, much information about the audit — some accurate, some not — made its way into the public domain at various times before the report's release.
[English]
We were very concerned by the numerous leaks of audit information. As a result, we engaged an external security consultant to investigate whether an office employee or contractor was responsible for leaking information. Based on the results of the investigation we received, I am confident that no leak of information came from our office.
[Translation]
Madam Chair, this concludes my comments. We are pleased to answer any questions you may have.
The Chair: Thank you, Mr. Ferguson, for having made your presentation in the two official languages of Canada. That is very good.
[English]
Colleagues, just before I go to the question period, I have to warn you that we have to break a bit earlier than usual because a significant number of the members of this committee are also members of the Legal and Constitutional Affairs Committee that is meeting at 11 o'clock in another building to consider the matter of medical assistance in dying and its report thereon. That is obviously a meeting of significant importance. We wouldn't want to have to lose large numbers of the members of this committee before we conclude, so I'm going to call this meeting to a halt at a quarter to 11. That will give us one hour and five minutes for questions. It will work wonderfully if everybody keeps his or her question concise. That also goes for the answers. I suspect that may not be a problem.
We will begin, therefore, with the deputy chair of the committee.
Senator White: Thank you very much, Mr. Ferguson and your staff, for being here today. Because I have been told to be concise, I will be. I'm going to go to your letter of April to this committee in relation to:
. . . I considered it necessary to limit speculation and correct information during media interviews on May 26 2015.
So you performed media interviews where you gave certain information to the public that wasn't public beforehand. Yet the actual hard copies leaving your office — in fact, even the sharing of hard copies among 11 OAG staff wasn't done until June 3, with hard copies leaving your office and going to the Senate on June 4.
I'm trying to figure out how the leaks could be anywhere but your office on May 26, because that's the reason for the interviews, in accordance with your letter was that the information was already being distributed.
Is there anyone else outside of your office who could have had access prior to May 26?
Mr. Ferguson: There are many people who had access to information prior to May 26, including individual senators, but I think I need to put all of that in context.
On May 26, questions came up about expenses of our office. The reason the media was interested in interviewing me was to ask about spending related to the Office of the Auditor General of Canada. In the course of that, I was asked a question about the audit of the senators' expenses, and it was referred to that 40 or 50 senators were going to be named. I felt that at that moment I had to correct that so that there wasn't going to be speculation that half the Senate was going to be in the report, and even worse, that maybe that would anchor a number of 40 or 50 senators at that point, and when the report comes out, it comes out with the 30 names that were in the report and somebody assumes that something happened in the meantime.
So what I felt at that point in time was because there was this discussion about 40 or 50, I needed to set that straight. That was the only thing that I mentioned.
In terms of where else that number could have come from, during the course of the work that we did, we had many meetings with the Senate Audit Subcommittee where the numbers of senators would have been known. We had meetings with the leadership of the Senate once on April 25 and once on May 3, as we say in the report. That would have been with the Speaker of the Senate and the two Senate leaders. At that point in time, we would have discussed numbers as well. There were other times when those numbers were discussed with other people.
Senator White: May I have a short follow-up?
The Chair: Very short.
Senator White: Thank you very much. In relation to stating you were referring a number to the RCMP, what was the expectation on your part to tell the media that you were referring a number to the RCMP?
Mr. Ferguson: That was also part of the question that I got. In fact, as I recall the question, it was 40 or 50 — the question was about there being three tranches, one tranche being 40 or 50 senators that we could be bringing to the attention of the Internal Economy Committee and another 10 senators that would be referred to the RCMP. So in the course of that interview, I thought that I needed to set that straight and say that the total number was 30, including the number that we were recommending to the Internal Economy Committee to consider to be referred to other authorities.
Senator White: Second round, chair. Thank you very much, Mr. Ferguson.
Senator Tkachuk: I'll just follow up. My question was on the interview with Evan Solomon, but I will just follow up on what Senator White said.
In that interview with Evan Solomon prior to the report being released, you confirmed that some of the senators that had been audited would be referred to the RCMP. However, in your letter to our clerk dated April 16, 2016, you write that you had a well-established approach of offering no comment on the audits, even if information had made its way to the public somehow. It contradicts what you just answered to Senator White.
You said you refused to confirm speculation about the Senate audit, but you did confirm with Solomon that some senators would be referred to the RCMP.
It contradicts not only what you just said here but also what you say in the letter, and then you put everybody under a cloud of suspicion by saying you're referring them to the RCMP, when in reality you would be referring to the Internal Economy Committee, which would then make a decision to confirm it to the RCMP.
So to me, this was a leak for sure of what was in the report before it was made public and before it was distributed to the senators.
Mr. Ferguson: I guess certainly that depends on your definition of "leak," I suppose. There's no question that I answered the question that I got from Evan Solomon. That's all on record. That's all publicly available, and what I said is on record. I'm not trying to tell you anything different than what I told Evan Solomon.
Again, the reason why I did that was because the question was put to me in a way that I felt was over sensationalizing what the results of the audit were going to be, and I felt at that time the right thing to do was to make sure everybody understood the extent of what we were going to be reporting on, and that's why I did that.
Senator Tkachuk: But you could have made it clear that you were referring the matter to the Internal Economy Committee, which would then make a decision as to whether anybody would be referred to the RCMP. It wasn't your take to do that, yet you threw a little more diesel on the fire by saying you were referring them to the RCMP.
Mr. Ferguson: I don't remember my exact words. If I said that we were referring them to the RCMP, then, of course, I would have made an error by doing that. I was trying to be careful anytime that I was talking about the audit to say that we were going to be presenting the information to the Speaker of the Senate to refer to the Internal Economy Committee to make the appropriate decision on what to do with the report. In the audit itself, we said for reference to other authorities, including the RCMP; we didn't even specifically say just the RCMP.
Again, without remembering exactly what I said in response to that, it is certainly possible that I could have been a little uncautious, I suppose, about the way that I worded that in the course of trying to answer the question. What I was trying to focus on was getting the number right.
Senator Jaffer: Thank you to all four of you for being here, especially to the Auditor General. I first want a clarification. My colleague Senator White asked you how many people knew and you said many people, and then you mentioned your office, the Senate audit committee and the leadership of the Senate. Was there anybody else that you spoke to?
Mr. Ferguson: Well, I guess in terms of individual senators, of course, by that time I think we probably had communicated with just about all of the senators, I believe.
Senator Jaffer: But they would only have their individual information, not the report.
Mr. Ferguson: That's absolutely right. That's what I was going to add, that they would have had only their information. So somebody would have had to then go around and ask individual senators and try to get the information in that way.
But in terms of people that we would have been talking to about the overall numbers, I believe it would have just been the Senate leadership and the Audit Subcommittee.
Senator Jaffer: There is speculation that there were 50 reports out, but when I read your letter, you said 12 copies of the report went to the Senate and 11 to your staff, so all together 23 before they were tabled; is that correct?
Mr. Ferguson: That's correct.
Senator Jaffer: Is it normal when you do a report to send a copy to the Prime Minister's Office?
Mr. Ferguson: No, we never send one to the Prime Minister's Office. When we issue our normal audits, we will do a briefing just before — a couple of days before. We will do a briefing with the ministers that the audits touch on. We will do a briefing with the President of the Treasury Board. We will do a briefing with the Clerk of the Privy Council Office. We didn't do any of that in the case of the Senate audit.
Senator Jaffer: You didn't send a copy to the Prime Minister's Office?
Mr. Ferguson: We sent no copies to the Prime Minister's Office.
Senator Jaffer: One of the things is that you asked every senator to sign a confidentiality agreement that they would not release any information. Did you think that you also had to hold the information you received confidentially?
Mr. Ferguson: I think if you go through the details of the letter that we provided, I think it's very clear how seriously we took the confidentiality of all of the information that we had and the different precautions that we put in place. I feel very confident that we put in all of the measures that we could possibly do to protect the information that we had made available to us through this audit.
Senator Jaffer: In your letter dated April 6, 2016, you state that we took additional steps to safeguard the information. What were your additional steps?
Mr. Ferguson: I'll ask Mr. Parisé to provide a bit more detail about the security measures that we took.
Jean-Charles Parisé, Principal, Office of the Auditor General of Canada: We decided to treat all information as Protected B information as per the Government of Canada government security protocol.
On top of that, all of the information sent to us was sent to us encrypted only and it was only available to the leadership of the audit team, so only a person like the principal of the audit and the directors of the audit would receive the information that we got from the Senate. That information was then unencrypted by that person only. Only that person had encryption for that information, and then the information was saved at that point to an internal system where we keep all our information on our audits.
That system is also on an access list, so only the people required to work on a certain file for a senator, which was also numbered, had access to that file.
Senator Jaffer: The Senate encrypted or the senators encrypted?
Mr. Parisé: The Senate encrypted the file and then sent it to us.
Senator Jaffer: What about individual senators? They didn't encrypt the file?
Mr. Parisé: No, individual senators did not encrypt the files.
Senator Wells: Mr. Ferguson, when you conducted your external security review or investigation, I think you call it here, was there a scan of phone records and email records as part of that external investigation to your audit team or people who would have access to the information that was leaked?
Mr. Parisé: For the telephone records, we did not. We did a scan of our internal system, our IT system, because we scan this all the time. We review these all the time. That was part of the investigation. We reviewed who had access to what. We reviewed the file to make sure that only people who were authorized to access certain files had access to these files, and that was okay.
Senator Wells: Just to be clear, there were no scans of people's outgoing emails or phone records?
Mr. Parisé: We always scan outgoing emails. Did we go through all of them to see where they went to? No, we didn't. Not to the detail, if I understand your question properly.
Senator Wells: You still would have confidence that no leak would come through that portal?
Mr. Parisé: Based on the investigation that was done and the interviews that were conducted with the people, the answer back from the investigator was exactly that.
Senator Wells: I understand based on that, but my question is to the depth of the investigation. Were phone records part of the investigation?
Mr. Parisé: No, they weren't.
Senator Wells: Thank you.
Senator Batters: Mr. Ferguson, as a result of this matter, you provided the Clerk of the Senate with a letter dated April 6, 2016, and that was provided to our committee. In part of the letter you stated:
Because of the volatility of the situation toward the end of the audit, I considered it necessary to limit speculation and correct misinformation during media interviews on May 26 2015.
Mr. Ferguson, on May 25, the day before your media interviews, CTV News ran a news story with this headline: "CTV investigation: Questionable spending by Auditor General's office." This new story outlined expenses, tens of thousands of dollars that your office spent on team-building events, staff luncheons and retirement festivities.
Mr. Ferguson, the media interviews that you did the next day had a considerable focus on your office's expenses. You then went on in those interviews to disclose information that we were not allowed to disclose for months according to our confidentiality agreement. In fact, Mr. Ferguson, it was only the last portion of your Evan Solomon interview that even dealt with your audit. The whole initial part of that interview was about your office's expenses.
Mr. Ferguson, would you accept that it is the case that your media interviews disclosing confidential information that we could not disclose increased the volatility of the situation?
Mr. Ferguson: No, I would not accept that. Certainly what I intended to do with that was to sort of get rid of the speculation that we were going to be talking about 40 or 50 senators with possibly another 10 referred to the RCMP. That's what I was trying to do. That's what I felt that I did by letting people know what the exact number was.
That was the extent of the conversation I had, simply to let people know the exact number we would be reporting on. That was, again, to eliminate the speculation about the number of senators that were going to be named. I feel, given the situation that I was in, that it was entirely appropriate to do that.
Senator Batters: Well, rumours and speculation had been ongoing on this matter for months. I recall on one specific occasion having national news reporters shout questions at me at the beginning of April, almost two months before this, as I walked to my national caucus meeting. At that point, I knew that I would not be named in your report, but I couldn't say that because I was under a confidentiality agreement.
I put it to you, Mr. Ferguson, that your confirmation of numbers of senators involved here put dozens of senators in a terrible situation. We had known for months that we would not be named in your report, but we were unable to confirm that because of confidentiality reasons. Yet, you then indicated how many senators were potentially the subject of your report and we still could not disclose whether we were or not because of our confidentiality agreement. Do you recognize that that put a lot of us in a very terrible position?
Mr. Ferguson: I recognize the position that senators were in throughout the course of this whole audit. Again, I believe what I was doing was trying to eliminate the speculation about it being 40 or 50 senators. Whether the media believed it was 40 or 50 or knew that it was 30, those same types of questions were going to be asked of senators, in my opinion.
I understand the difficulty that senators faced throughout all of this because of the length of time it took to get through all of the expenses and for us to get a report out, and that that meant senators would have often been the subject of people trying to ask questions. I don't feel that when I referred to it as being 30 that it made the situation any worse, because there was already speculation about there being 40 or 50 senators.
Senator Joyal: Welcome, Mr. Ferguson, your assistants and members of your office.
I would like to pursue that line of questioning because I think that you don't realize enough — I say that very respectfully, sir — that once you start speaking to the press, you put your finger in a machine and you trigger a system of curiosity of media that feeds itself.
By breaking the commitment we had with you when we met you for the first time for you to inform us of what would be our obligation of confidentiality. As you said, we were asked to sign the confidentially agreement with you. Once you took the decision that you're going to defend yourself because you wanted to eliminate the speculation on the cost of the audit, we were not put in the same position as you. We could not address the speculation that was on each and every one of us.
I don't know if you know what the cost is of the reputation of a politician, Mr. Ferguson. The only asset that we have is our reputation. When you defended yourself, your office, your integrity, which I think you're entitled to, we have exactly the same right to defend our integrity and our honesty and the trust the public has put in us as legislators.
As my colleague Senator Batters mentioned, a journalist bumped into me at one point and said, "You received a letter that you are supposed to reimburse." I could not say, "yes" or "no." I had to say to that journalist that I was committed to confidentiality. Of course, the inference was that I was requested to reimburse, which was not the case at all. I had already received a letter from you that I was not being named in your report.
When you were on the stage with wrong information surrounding the cost of the audit, you decided to defend yourself and set the record straight. When we were put in exactly the same position as you, we were committed and bound by the letter of agreement we had signed with you.
Do you understand that kind of imbalance, Mr. Ferguson?
Mr. Ferguson: I think there are a few things in your question that I need to correct. First of all, I was not trying to defend the office or myself or anything else. It was not about trying to defend the audit or what we did in the audit. What it was, was there was speculation about how many senators were going to be named.
Senator Joyal: No. I'm talking about the speculation of the cost of the audit that you said, in your first answer to Senator Tkachuk, that there the rumours of cost that surrounded the whole audit. That's what you said to Senator Tkachuk.
Mr. Ferguson: Again, I will explain what happened. We were getting questions about expenses of the office, not expenses related to the Senate or the Senate audit. We were getting questions about our office expenses, which were publicly available information on our website.
I was getting a number of requests for media interviews to talk about some of the types of spending that Senator Tkachuk mentioned in terms of our office. That was not about defending the cost of the audit, of the senators' expenses or anything else related to the audit of the senators' expenses. I was simply answering media questions about spending around our office. In the course of that, I received this question which talked about 40 or 50 senators.
I actually felt I was acting in the best interests of senators. Perhaps that was not the case, but I tried to try to make sure that people understood that, no, we were talking about 30 senators. I also didn't want people to feel that, perhaps, the number was going to be 40 or 50 senators and then it was going to be reduced down to 30, and that something might have happened in between that time period and the time we released the report.
So what I was doing was in no way trying to defend anything related to us or how we undertook the audit. I felt at that point and time that the speculation was becoming overheated and I felt that it was appropriate to refer to the fact that it was 30 senators.
That was not a leak. That was something that I did in full public record, mentioning that number.
Senator Tkachuk: Yes, but when you —
The Chair: We must move on. I will put you on a second round.
Senator Martin: Thank you for being here. I just have a few questions going back to the external security consultant and the process that may have been undertaken.
You stated in the letter as well as today that you engaged an external security consultant to investigate whether an office employee or contractor was responsible for leaking information, and that based on the results, that you are confident that no leak took place in your office.
My first question is: How many contractors were involved in the audit process? Were they available, or were they present, to be part of the external security consultants assessment of the leaks?
Mr. Ferguson: I am not sure I know the number of consultants. I'll ask Mr. MacLellan to respond.
Clyde MacLellan, Assistant Auditor General of Canada, Office of the Auditor General of Canada: We engaged 11 consultants in the performance of the audit. I'll ask Mr. Parise, who oversaw the investigation, to determine whether they were part of the sample.
Mr. Parisé: I believe they were part of the sample for the interviews.
Senator Martin: Okay. Would you elaborate on the process? For you to have concluded that there was no leak, I'm curious as to the thoroughness of the process and what took place.
Mr. Parisé: We reviewed everyone who touched files that had to do with this audit. We provided those names to the external firm to do the interviews, including the consultants and even including people who weren't connected directly to the audit. If we felt that some information — they had access to information, because it's public on our intranet — some information our intranet — we even looked at this, and said, "We'll interview these people, also, just to make sure."
We went throughout the whole team, including consultants and even people outside of the direct audit.
Senator Martin: So I'm not necessarily hearing absolute — I'm not fully convinced that we can make such conclusions about the office, per se. I want to highlight the fact that it is reported that leaks to the media about audits by the Office of the Auditor General, with all due respect, are neither new nor, unfortunately, rare. Between 2001 and 2007, the then-Auditor General said that 10 performance audits had been leaked to journalists before being tabled in the House of Commons.
So it's human error. Things do happen. A lot of people are involved. Even for me, in my personal audit, the people who began were not the people who ended, so I was concerned about what happened in between, as well.
What assurances can you give to us that, in this external review of the security leaks, et cetera, you are absolutely convinced that there were no leaks from your office? What evidence was produced? Is that public?
Mr. Ferguson: So, again, Madam Chair, certainly I think what we said was that we are — and I'm just checking my wording, right — so that we are confident. I didn't say that we are absolutely certain. I can never say "100 per cent."
Given all of the precautions that we had put in place, the environment that exists in our office to protect the information and the fact that there is no reason for us to want to leak the information — there is no advantage to us to do that — and the work that was done by investigators sitting down and talking to all of the people who we were able to identify who were involved in the audit — you know, we are and I am personally confident that the leak did not come from our office. Again, I can never say that I am 100 per cent certain or absolutely certain, but I am confident that any information did not come from our office.
The Chair: Mr. Ferguson, in light of this extended discussion of a report that was provided to you after this investigation, I think it would be very helpful to the committee if you could provide us with a copy of that report.
Mr. Ferguson: Absolutely. The report, by definition, is very short; it's only a couple of pages long. It talks about the timeline and I think the fact that the people we hired to do the work talked to about 60 people. We specifically asked for the report to be very short because we didn't want you know personal conversations to be transcribed in the report. This was an investigation, and people needed to know that they had security around what they were going to say. So the report is very short. But we will have it translated; the report we received is in English. We will have it translated and then delivered to the committee.
The Chair: Thank you.
Senator Martin: One supplementary on that.
The Chair: I'm going to be kind to you, as long as it's a very short one.
Senator Martin: The report is short, but did you have an extended conversation with the person producing the report? You say you are confident that there were no leaks from your office. I'm curious as to how extensive your review of that report would have been.
Mr. Parisé: I had a lot of conversations with the investigator. They were pretty confident that it didn't come from our office.
The reason that we kept it that way because I wanted to make sure that the people who were getting interviewed — because it's an invasive type of process — felt they were free to say whatever they wanted to the investigator. We weren't going to see the details of the conversations that they had with the investigator.
I think that worked well, because the people were free to talk. The investigator told me exactly — same words — "we didn't find anything in here that would make us believe that the leak came from your office."
Senator Cools: Thank you for coming before us, Mr. Auditor General. Mr. MacLellan, it is nice to see you again. I've never met you, Mr. Parisé.
I was very struck, Mr. Auditor General, when you said that you had confidence in the fact that the leaks did not come from your office. I might suggest, sir, that your confidence would have been greatly enhanced had you not elected to name senators in your report. I just put that out to you on the grounds that the fact that senators were being named would have been of great interest to the early-bird journalists who want these stories in advance. So in a funny kind of way you put yourself, I think, in a very unfortunate set of circumstances.
Auditor General, I'm sure that you know very well that I sincerely believe, after about 20 years of study on the role of the history of the Auditor General of Canada, that there is absolutely no power in your act to authorize the audit of the Senate. I do not believe — and I have had this confirmed by many lawyers — that there is no motion of the Senate, even if adopted, that can amend the act to give you a power to audit the Senate. So I begin on the position that I've been harping on for the last many years.
I would like to just put on the record, in following up on Senator Joyal's comments, that reputations are everything for people who are in the business of serving in politics. The great Mr. Blackstone once said, "The right of personal security consists in a person's legal and uninterrupted enjoyment of his life, his limbs, his body, his health and his reputations." We have nothing else other than our reputations.
But yet, Mr. Auditor General, you elected to name 30 senators, at least, in your report. I saw some of these senators as they were receiving this news. I swear to God, I thought some of them were going to die in my presence. So this was a choice that you made. I know that Senator Pierre Claude Nolin had challenged you on that.
In any event, you persisted in naming individuals in this report. My question to you is: In choosing to do that, as a willful strategy or as a willful method, what steps did you take to protect all those senators named from breaches of their privileges and from the possibility — I would say the high possibility — of leaks? What did you do to protect these people's reputations, knowing full well that you were identifying them by name with what was always only your opinions?
Mr. Ferguson: We took very seriously the fact that we were auditing people that their reputation mattered to them immensely. We were very conscious of that. We understood that. That's why we put all of the precautions in place that we put in place.
The decision around naming senators in the report was one that we took after many conversations and looking at what had gone on in other jurisdictions as well. We realized that we were going to have to deliver a report that the Internal Economy Committee would have to deal with, so they needed to know who they had to deal with, who they had to address in terms of some of the spending. So they needed to have the names.
I believe it was in Nova Scotia where an audit was done of members of the legislative assembly and names were not provided, and there became so much media pressure on the government that they ended up having to release it.
So if there had been a report that indicated there were a number of senators that should be reviewed, should be referred to the Internal Economy Committee, but with no reference to who those senators were going to be, that wouldn't have ended the conversation. That would have just resulted in much more speculation and much more attempt on the part of the media and other interested parties, perhaps, to try to get to the understanding of who those names were.
Again, we felt in fairness to all senators, those named and those not named, and in fairness to the Internal Economy Committee to know what it was going to deal with, that we had to name senators.
Senator Cools: What you seem to be overlooking is that senators had a right and a privilege to receive your Auditor General's report unleaked and unknown to the public. I don't think you fully grasp that. We have a right as senators, by our privileges, to receive information, reports, whatever they may be — correspondence — unintercepted by others. That is a privilege that we have. It's part of the whole freedom of speech. It's part of a bundle of privileges. That is what was violated, that this was in the public domain before senators received it in the Senate.
Mr. Ferguson: That was not violated by me or by my office. We did not leak the report.
Senator Cools: I am not saying that you did. I have no interest in going down that road. But you opened a very bad door.
Senator Ogilvie: Thank you, chair. Thank you, Mr. Ferguson, colleagues. This was a unique experience, I suspect, in the annals of most of us and, indeed, of major organizations.
I would like to come again to the interview. You have made it very clear that you were responding to a rumour in the press that indicated 40 to 50 senators were involved in the report.
What I would like to know, because you said you felt it was necessary for you to clarify that, which really your clarification was simply to bring the number down. Was there an identified source of the number 40 to 50 in the press that you considered to be potentially credible, such that you felt it absolutely necessary — that that was the basis of your feeling it necessary to change the number — not the context, but the number — that would be identified in the report?
Mr. Ferguson: So, again, the circumstance that I was in was I was in to do an interview on an entirely different subject. The interview was not supposed to be about the senators' spending. So then when the interview turned that way, and there ended up being this speculation of 40 or 50 in a televised media question on a televised media news program, I felt at that moment — and I had to make the decision on the spot — I felt at that moment that I needed to clarify that, and bring the precision that, no, it was not going to be 40 or 50, that it would be 30. That was a decision I made on the spot trying to answer a question.
Senator Ogilvie: Thank you. You have clearly indicated you didn't have an identified or credible source of the 40 or 50.
I would submit to you, Mr. Ferguson, that you were under no more pressure than any of us as individuals, senators, who were in front of cameras, as has already been identified, with exactly the same question. That there was no more need for you to give any credibility to any number than there was for any of us to respond with regard to our own personal situation.
Mr. Ferguson: Madam Chair, I made that decision on the spur of the moment. I felt it was the right decision to make. I still feel it was the right decision to make. I understand that other people may question that decision and may feel that I should have handled that in another way. But at that moment I felt that that was the right thing to do, was to bring some clarity that we were not talking 40 or 50 senators, also to the fact that, you know, again, I felt that there could be some speculation that if there was a number of 40 or 50 senators out there, and then at the end the number became 30, that there could be speculation that there was some pressure brought on us to try to reduce the number. I felt at that moment, given the conversation that was going on in that interview, that the best thing to do would be to bring some precision to that number. And again, I stand by the decision I made at that time.
The Chair: Before I go to a second round, I do have a question, a rather more systemic question. You have provided us with some detail on the management systems that you set up to control information. I assume that all of these were within the normal policies and procedures that exist in your office.
What I don't know and would be very interested to know is what exists in the way of possible sanctions if you do discover that information has been leaked, and you know who did the leaking. This goes beyond this specific case. I'm really looking at trying to understand the policies and systems that you have in place.
Mr. Parisé: In our security policy, we explain that depending on the gravity of what has been done, that it could go up to the person losing their position essentially.
The Chair: What would be the lowest level of sanction?
Mr. Parisé: Lowest level, sometimes what we will do is, for example, in the security sweep, if we find stuff, we would give the person additional security awareness. We will start there. After this, they will graduate, depending on the gravity of the event.
The Chair: Has anybody ever been dismissed from your department for leaking information?
Mr. Parisé: Not that I know of. I don't believe so, no.
The Chair: No. Thank you very much. Second round.
Senator White: Mr. Parisé, I'm reading information from March 19, 2015, where the office of the Auditor General acknowledged that they lost over 120 encrypted USB drives. I know you know that encryption of USB drives is faulty at best. Most people don't use the encryption codes that come with them because it's too difficult, not that the drives themselves are. Is it possible that any information from any senator's office, any of the information we provided was lost in those thumb drives?
Mr. Parisé: We don't believe so. For our encryption keys, you have to use the encryption. You cannot save anything on the key unless you use the encryption password. There is no way to go around using the encryption if you want to save information on an encrypted key.
Senator White: During the period of our audit, was any information lost in any other manner, files lost, documents left in cars, anything like that? Any reports?
Mr. Ferguson: Madam Chair, so in the question, senator, that you're asking about the 120 thumb drives, none of those would have been used in the Senate audit. That was an exercise that we undertook to do the inventory of our thumb drives — the USB drives. I mean, we realized that we weren't controlling them the way that we should. So Mr. Parisé, through his group, they did an inventory of them and we found that there were those problems. None of those were used in the Senate audit.
We then put in place procedures around controlling thumb drives used during the Senate audit. There is one of those, again encrypted, that is not accounted for. There is one fully encrypted USB drive that was used in the audit of senators' expenses that is unaccounted for.
Senator White: Thank you very much, Mr. Ferguson. The second question to that is: Has any other information, files or documents in relation to Senate audit gone missing and it's unknown where they rest?
I think Mr. MacLellan would like to answer.
Mr. MacLellan: In answering that question, we have had all the files returned. There was one file — which was a procurement invoice for photocopying given to us — in our possession that we could not locate and therefore have been unable to return to Senate administration. Every other file that we received has been accounted for and returned.
Senator White: With the exception of one USB and one procurement file.
Mr. MacLellan: Which had one invoice in it.
Senator Jaffer: Just one clarification. All files have been returned to the Senate? I thought you keep some documents in your office; is that correct?
Mr. MacLellan: Yes, that is correct. When I say "all files," any of the original files that we took from Senate administration we returned back to them. For purposes of supporting our audit report, which is standard practice under our standards, we took copies of information to substantiate what we had written. Those files are in our custody.
Senator Jaffer: And senators' documents are in your custody?
Mr. MacLellan: Original materials that we got from senators have all been returned to senators.
Senator Jaffer: But you have our copies.
Mr. MacLellan: Only to the degree that they are necessary to support what is in the report.
Senator Jaffer: When you say "all files were returned," all information has not been returned. You have kept some; isn't that correct?
Mr. MacLellan: Yes.
Senator Jaffer: I just have a clarification question for you, Mr. Parisé. All employees and contract workers were not interviewed. It was a sample, correct?
Mr. Parisé: If we look at the total number of people that were on the audit, that is correct.
Senator Jaffer: Mr. Ferguson, the question I have for you, it is very troubling. We were under a confidentiality agreement. We couldn't utter a word, but you decided you could. You did go and say what was in the report. When you first met with us, you assured us that there would be confidentiality on both sides. Do you not feel you breached that confidentiality?
Mr. Ferguson: The only thing that I referred to was the number of senators that were going to be named in the report. I did not give any details about the senators. So no, I don't feel that I breached any confidentiality. I was trying to set the record straight on the fact that there was speculation about there being upwards of 50 senators. I felt that the record needed to be set straight.
Senator Jaffer: If a reporter stopped me and said, "Are you one of the 30?" and I would say have said, "No," would you have considered that a breach of confidentiality?
Mr. Ferguson: If it had been that simple, no, I don't think I would have considered that a breach of confidentiality, if you had decided that you had wanted to do that.
Senator Jaffer: But I was under a confidentiality agreement with you up to the end.
Mr. Ferguson: Again, I'm going to stick — I don't feel that I breached any confidentiality agreement by setting the record straight in terms of the speculation that was around about the number of senators that were going to be in the report.
Senator Tkachuk: Just so it's clear, you also made reference to the RCMP during that interview as well, Mr. Auditor General.
Mr. Ferguson, there were not only employees of the Auditor General that were assigned to the Senate audit, but there were also contractors. How many contractors were engaged from outside of the Auditor General's office for this audit?
Mr. MacLellan: Eleven.
Mr. Ferguson: I want to clarify one thing, if I could. The 11 would have been contractors who would have been working directly on the audit. We also had external legal counsel involved. There would have been some other people like that. The 11 refers to the number of contractors that we hired to act as auditors.
Senator Tkachuk: What security precautions did you take in hiring these people? Where would they have come from?
Mr. MacLellan: The source of the contractors was largely from large public accounting firms. Our processes around ensuring security with regard to those individuals, obviously we have a contractual arrangement with them which includes the necessity to manage confidentiality. They would have been subject to the same processes and procedures that all of our staff would have been with respect to the custody of documents, how they handled information and the extent to which they would have been exposed to information.
They would have been subject to exactly the same rules, policies and procedures that governed every other employee of the office working on the audit of the Senate.
Senator Tkachuk: Did they work at home or in your office?
Mr. MacLellan: Almost all of the work during the key portion of the audit was conducted at the Chambers Building, one of the Senate administration's sites at which we had an office that was provided to us. The files never left that site.
Senator Tkachuk: We had an odd situation with the people doing our audit. The lead lady was from the Auditor General's office, and then there were two contractors, but one of them we could never get by phone, which we tried to do on numerous occasions. The two contractors, it seemed, were split in two. One had to do certain things; one did other things. We had no trouble with one of them, but the other one, we assumed she either wasn't available by phone or wasn't even working in the office. Is there any chance she would be working at home?
Mr. MacLellan: No.
Senator Tkachuk: None whatsoever?
Mr. MacLellan: No.
Senator Batters: Mr. Ferguson, your report indicates that 12 hard copies of your final report were hand delivered to the Senate Speaker's office at approximately 11:50 a.m. on Thursday, June 4, 2015. Please confirm that prior to that time the Senate had not been provided with any copies of your final report, correct?
Mr. Ferguson: That is correct.
Senator Batters: Your report to us also indicates that your external contractor's investigation commenced on May 29, 2015, about a week before your report was even delivered to the Senate; is that right?
Mr. Ferguson: I can explain the dates related to the investigation if you would like me to.
Senator Batters: Is that date of May 29 correct?
Mr. Ferguson: It sounds correct, yes.
Senator Batters: May 29, that would have been at a time when the Senate didn't have any final copies of your report. Your office had also realized by that particular point that you had a problem with thumb drives, because it had been reported in the Toronto Star. As my colleague Senator White brought up earlier, that had been known for some time, correct?
Mr. Ferguson: It was before the date that we delivered the report to the Senate, absolutely.
Senator Batters: Yes. And at a time when you realized there could be a problem with thumb drives?
Mr. Ferguson: We had already put in place measures to control thumb drives related to the ones that we were using on the Senate audit. As I say, they are all accounted for except one.
Senator Batters: Except for one. Thank you.
Senator Joyal: Mr. Ferguson, I want to raise the issue of the ownership of the information that each and every senator has been providing to you for those two years of audit. I sent you a letter on June 17, 2015, almost 11 months ago, saying this, "I consider myself to be the sole and exclusive owner of these documents. They are protected by parliamentary privilege, a privilege I never consented to waive for the purposes of your audit. With the completion of the mandate for your audit, you are no longer entitled to keep information from me in your possession."
I claim to have the right to get those documents back. When will you return those documents to me and to each and every senator who has been the object of an audit?
Mr. MacLellan: We need to keep information to support our audit opinion for a period of time that will last 15 years, according to our own records management system. It is necessary, under our professional standards, to be able to have the information to support the conclusions that we have reached.
Senator Joyal: I contest that, because in the Ethics and Conflict of Interest Code for Senators, section 58(1):
The Senate Ethics Officer shall retain all documents relating to a Senator for a period of 12 months after he or she ceases to be a Senator, after which . . . the documents shall be destroyed.
How can you claim we would be under a harsher regime under your rule than we have committed ourselves under the Ethics and Conflict of Interest Code for Senators? Those documents are protected by privilege and privilege supersedes your internal regulations.
Mr. Ferguson: As has been explained, we looked very carefully at the retention of the information. Any information we don't need to support the conclusions has been returned. Any original documents have been returned. Any documents we felt we needed to keep in order to support our conclusions we have put in place secure measures to deal with that.
We are respecting our professional requirements as professional accountants about retaining the evidence and the information that we collected, entirely respecting the fact that we don't want or should not have any information that we don't need to simply support the conclusions that we have arrived at.
The Chair: Supplementary, if I may.
Senator Joyal: Yes, but I also have a comment to add to this.
The Chair: I'll come back to you. I'd like to you to clarify the phrase "our requirements." Are these requirements internal rules established by your department, or are they part of whatever the professional association of accountants requires? Whose requirements are they?
Mr. Ferguson: Well, it would be, Madam Chair, around our professional accounting requirements to make sure we have sufficient, appropriate audit evidence to support our positions.
In terms of the length of time we keep it, that would be part of our records management system. We would make that decision related to audits that we do. That would have been an internal decision.
Senator Joyal: You will understand, Mr. Ferguson, that your recommendation 57 of your report:
The Auditor General of Canada should be given a clear mandate as the external auditor to conduct audits of the Senate of Canada, including audits of Senators' expenses. The Auditor General should have unrestricted access to all information needed to reach audit conclusions on the expenses incurred by Senators, including information in the possession of individual Senators.
You will understand that I will have great personal restrictions to vote for such a recommendation if we don't agree between your office and the Senate on the issue of the access to our information once, at least, we leave the chamber, 12 months after we leave the Senate, as it is in the Conflict of Interest Code. We have already debated this issue extensively. We feel that this is the privilege of a senator, once he leaves the institution, to be protected, otherwise, any leaks can happen. Even though you claim that your operation is totally tight, there is no absolute, 100 per cent confidentiality guaranteed. The Canada Revenue Agency operates under confidentiality. They broke my income tax receipt declaration last year and I had to make a complaint to the Privacy Commissioner.
Even though you are an Officer of Parliament, you are supposed to help Parliament. In such instances you have to review those regulations inasmuch as you deal and are requested to deal with personal information related to individual senators, not administration.
Mr. Ferguson: I don't really think there's much I can add. I guess maybe the one thing I would refer to is in terms of the recommendation that we made and the clear mandate. I would certainly expect that if the Senate were to provide us a mandate around doing the audits, certainly working out something like retention period and management of those files would be something that we could work out in that mandate. If it was a regular, ongoing process, we certainly would be willing to look at how access and storage of that information would work would be something that could be identified in that mandate.
Senator Ogilvie: Mr. Ferguson, I want to come back to my earlier question and your answer and subsequent elaboration with regard to the issue. You clearly have not indicated there was an identified, credible source of the leak in any context that is larger than you've tabled here today. You've indicated that it was a judgment call on your part to release the specific number. That number gave tremendous credibility in the public to an issue affecting all senators. I would submit there was no more reason for you to make that judgment call. In fact, I would submit that under general confidentiality you didn't have a right to make a judgment call in that area. In fact, those of us as individuals who were in front of cameras, hounded and pestered for a very great length of time but never once appeared before national press, because we never gave an answer that was useful to anyone in the context of this issue, that we were under at least as much pressure as you were in that circumstance, and we considered it was not our right to make a judgment call to tell them whether or not we were identified in your report.
I wish to simply leave it as a comment that I think your judgment was flawed in that case. Thank you.
The Chair: Do you wish to respond?
Mr. Ferguson: I've defended my position, Madam Chair, and I stand by what I've said.
The Chair: There have been several references to the letters where senators undertook confidentiality. Were all of those letters the same standard wording?
Mr. Ferguson: Certainly when we issued them they were all the same. There may have been some individual cases where not necessarily everybody signed them, but I'll ask Mr. MacLellan if he wants to elaborate.
Mr. MacLellan: The considerable majority were exactly the same as requested when we sent the original letter. Not all were the same. We undertook a series of communications with individual senators who did not wish to sign it as-is, or who had questions around the nature of the letter they were signing. In the end of the process of communication back and forth between individual senators with respect to the objectives of that letter, namely, the confidentiality, the responsibility for the areas under the audit and the management of information, we reached the conclusion that the substance of what we had undertaken to achieve had been met in all of those cases.
The Chair: Thank you. We all got the letters. When forwarding the report we asked for, could you also forward, for the committee's purposes, a copy in both languages of that letter that you asked senators to sign?
Mr. MacLellan: You mean the form letter that we asked for?
The Chair: Yes.
Mr. MacLellan: Yes, we will do that.
The Chair: Clearly the confidentiality portion is of most interest to the committee at this stage.
Mr. MacLellan: Yes. I understand.
The Chair: Finally, if I may, Mr. Ferguson, the motion that was adopted, I believe, on June 6, 2013, was to the effect that the Senate invite the Auditor General of Canada to conduct a comprehensive audit of Senate expenses, including senators' expenses. In the event the audit concerned, to the best of my knowledge, only senators' expenses, I wonder if you could tell me what led to that decision.
Mr. Ferguson: I will ask Mr. MacLellan to elaborate again. Fundamentally, the decision was made on the basis that we had just completed audits of the administration of both the House of Commons and of the Senate. We had essentially done the work about how the administration handled its part of the business. We felt that there would not be much that could be added by us going in and looking at it again at that point in time.
Mr. MacLellan: Nothing further. That was the decision that led to the scope of the audit as you now understand it.
The Chair: I shall yield to Senator Joyal.
Senator Joyal: What determined you to decide to conduct a forensic audit instead of a performance audit of individual senators?
Mr. Ferguson: Again, the decision was that given the circumstances at the time, we needed to look at every expense of every senator for that period of time. Anything else would continue to lead to more speculation about the situation related to senators' expenses. That's what we brought forward. We would do a complete and comprehensive audit of all spending by all of the senators within that two-year time period. Again, it was to make sure that when we reported, that there would be public confidence that the full picture of senators' spending over that period of time was known.
Senator Joyal: Would we have to understand that if we give you the mandate as per recommendation 57, you're going to do exactly the same thing that you have done in the two years that were under audit?
Mr. Ferguson: No, that recommendation would be — because it would be an ongoing regular audit function — that recommendation would be more on the basis of a sampling of senators' expenses to be able to provide an overall picture of the appropriateness of the spending at a global level.
In a regular audit you can do that type of thing. In this case, because there hadn't been an audit like this done, we felt it was necessary to look at all spending of all senators for that two-year period.
The Chair: Thank you. We are now heading into overtime, but I have Senators White, Tkachuk and Cools who wish to put questions. You each get two minutes, colleagues.
Senator White: Again, thanks, Mr. Ferguson. Is it normal practice for the Auditor General to make recommendations or refer people being audited to the RCMP?
Second, the offer you made to parliamentarians to review expenses I take it that included all parliamentarians, from the House of Commons and the Senate?
Mr. Ferguson: Again, what we did here was make a recommendation that the Internal Economy Committee consider referring a certain number of cases to other authorities, including the RCMP. That was what we had done. I think in similar circumstances that's how we would handle it.
In terms of the mandate, we were before a committee of the House of Commons a couple of years ago. I'm afraid I've forgotten the exact name of that House of Commons committee, but we offered there as well that we would be willing to undertake a mandate there in terms of auditing expenses of the House of Commons. Then we have this recommendation in the audit of senators' expenses about having a mandate related to senators' expenses.
Senator Tkachuk: I have just two quick questions. Wasn't there a sampling done of senators' expenses in 2012?
Mr. MacLellan: Yes.
Senator Tkachuk: Was there not also in the administration part was there not also an audit done on residency? Wasn't the residency issue looked at?
Mr. Ferguson: Again, what we were looking at in those cases was how the administration handled those files, whether they be related to expenses or residency. In the course of that, we did not have access to all of the information; we only had access to the information that the administration had as opposed to information that might also be in the possession of the senators.
So that is not what I would have considered a sample-based audit of senators' expenses. That would have been a sample-based audit of how the administration was processing the claims once the claims got to the administration.
Senator Tkachuk: Just so I'm clear here, there was a sampling of senators' expenses done in 2012?
Mr. Ferguson: There was a sampling of senators' expenses, but again, unless I've —
Mr. MacLellan: No, I think the Auditor General's response is accurate in that in the sampling done with respect to financial management and control of the finances in the administration audit, part of the sample included individual transactions of senators, but the focus was on the role of the administration in providing oversight.
Senator Tkachuk: Okay. Thank you.
Senator Cools: Thank you. Perhaps, Mr. Auditor General, you might want to reconsider recommendation 57. You may want to reconsider it, because that would demand a full overhaul, a total overhaul of the Auditor General Act. The business of the Auditor General, as you know, was created around what they call the appropriation audit. And the Senate and the House of Commons are no part of the departments of government, so they are no part of the public accounts. You might want to rethink that recommendation. That's for another day.
I want you to explain to me about what you meant exactly when you said that you did not violate the confidentiality agreement; you were only setting the record straight. I wonder if you could tell me exactly what you mean by "setting the record straight."
Mr. Ferguson: I think I've explained that a number of times, but I will explain it again.
There was speculation that there were going to be upwards of 50 senators named in the report. And this was in a very public television program that people watch to get their news that was talking about there being — that 50 senators were going to be named. I felt that it was in the best interests of everybody — that's my own judgment, and I respect that other people may question that judgment, but I stand by it. I felt that at that point in time, the best thing to do was to remove that speculation and say that no, it was not going to be 50, that it would be 30.
Again, that was my judgment that that speculation was not helpful and would not be helpful to the final audit or to senators to have speculation of 50, so I felt it was in the best interests to identify that it was going to be 30.
The Chair: Thank you. We have in fact run over time.
Senator Cools: Interesting.
The Chair: It has been extremely interesting. Thank you very much, Mr. Ferguson, Mr. MacLellan, Mr. Parisé and Ms. Gomez. We look forward to receiving the materials we asked for from you.
As a last request, if you have any documentation, Mr. Parisé, about the scale of sanctions that you apply, that would also be helpful.
(The committee adjourned.)