Proceedings of the Special Senate Committee on the
Pearson Airport Agreements
Evidence
Ottawa, Thursday, August 24, 1995
[English]
The Special Senate Committee on the Pearson Airport Agreements met this day, at 9:00 a.m., to examine and report upon all matters concerning the policies and negotiations leading up to, and including, the agreements respecting the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport and the circumstances relating to the cancellation thereof.
Senator Finlay MacDonald (Chairman) in the Chair.
The Chairman: Come to order please. Mr. Nelligan will introduce our first witness this morning.
Mr. John Nelligan, Q.C., Counsel to the Committee: Senators, our witness today is Mr. Bill Neville who is a senior partner of Hession, Neville and Associates, and he has been involved in the government consulting business for some years.
I may say in parenthesis that I had received an earlier memorandum from Mr. Neville which I hadn't understood was to be distributed because I thought he was just indicating to me generally what his position would be. I have had copies ordered now and they will be available in a few moments.
With respect to a second letter, it arises out of the request of the clerk to provide invoices on the Pearson file, and as you know, we have had some difficulty in getting the actual numbers on invoices because the rules which apply to the Access to Information Act have been applied to those invoices as they are available through Justice. In any event, that is the circumstances under which we sent that request, and he replied by letter of August 17th which I believe you already received copies of.
Senator Kirby: Can I just repeat a request I had yesterday and ask the counsel if the illusive Mr. Stehelin is still in hiding?
Mr. Nelligan: The latest word is he is in Labrador on a fishing trip. It is the best time of the year to go, I will say that.
Senator Kirby: That is a different version of going to ground, I guess.
(Bill Neville, sworn:)
The Chairman: Mr. Neville, you have an opening statement?
Mr. Bill Neville, Chairman, Hession, Neville and Associates: Before I begin, perhaps allow me a minor point of clarification. I am currently the Chairman of Hession, Neville and Associates, a partnership with Ray Hession who has already appeared before this committee.
I just want to make it clear that at the time of the events that are under discussion before this committee, in particular in terms of my own activities, I was the President and sole owner of William H. Neville and Associates. It was only after my relationship with Paxport and indeed Mr. Hession's ended in October '93 that he and I formed our current partnership. What I am discussing today is a role at a time when my company was William H. Neville and Associates, and I was not a partner with Mr. Hession.
With that Mr. Chairman if I may, I welcome the opportunity to appear this morning before this committee. I hope I can make a modest contribution to your search for truth in regard to the Pearson redevelopment contract.
As your counsel has already noted Mr. Chairman, I previously submitted two documents to Mr. Nelligan. The first dated June 30th is a memorandum outlining in general terms my relationship and role with Paxport and offering on the basis of my experience and observation some comments in regard to the process involved in the Pearson contract award.
The second, dated August 17th, is a letter in response to one I received from your clerk confirming my appearance this morning and asking me to submit certain documents in advance. My letter registers my concern in principle in regard to the request for documents, and having registered that concern, provides specific detail on my contractual relationship with Paxport.
In the interest of brevity, I don't intend to repeat any of that material at this point, however I did invite Mr. Nelligan to share both documents with committee members, and I would be happy to answer any questions arising from them.
Instead by way of opening comment, perhaps I might say a word or two about two questions which seemed relevant to issues before you, especially as they apply to consultants, or lobbyists as you prefer, such as myself. What exactly do government relation consultants do for their clients such as Paxport who are competing for a major government contractor or procurement?
Obviously I can only speak from personal experience covering some 25 years in this business, but I would be fairly confident in suggesting that what I have to say about my role in services to clients applies equally to most other consultants, and I think that was borne out yesterday in the testimony of Messrs Near, Fox and Metcalfe. It is a subject often wrapped in a certain amount of mystery and intrigue by some members of the media and some politicians, I might say, who appear to want to turn every government transaction into an exercise in political influence if not outright malfeasance. If that is your intent or mind set, then those shadowy figures, they lobbyists make for great script material.
The truth is less titillating perhaps, and really quite simple and direct. What I did for Paxport, what I do for any client, is hopefully to provide them with at least some competitive edge by ensuring first that they are well and accurately informed about the circumstances in which a government decision is to be made, and secondly, by providing them with what I hope is astute advice on how they can best pursue their legitimate interests and objectives within that decision-making environment.
It is information and intelligence garnered from a network of contacts at all levels of government, political and bureaucratic, built up over three decades of activity in and around the system. Information that hopefully is more and better than one could obtain from the press, but nothing that would not and is not obtained by others with a good network based on mutual trust. And certainly nothing that is in violation of the Official Secrets Act or anyone's oath of office.
It is advice based on a longstanding interest and involvement in how government makes decisions. Not only the formal structures that exist for that purpose, but perhaps more important, the less formal processes and personalities that are at play on any given issue.
There is, to be sure, a third element in a consultant's role, that of direct representation on behalf of a client as governed under the Lobbyists Registration Act. I have always argued that this part of the business is overstated and overrated by some. I have yet to see a lobbyist, Mr. Chairman, who can makeup for a poor client case. But one can and does on occasion provide a helpful service by ensuring that decision-makers in fact see your client's submission and they have it argued by someone they know and whose views presumably they have some time for. These are precisely the services I performed for Paxport. They are the business I am in.
The second question is whether or not in this particular case there was anything improper or undue, to use I believe Mr. Nixon's term, in these lobbying activities in support of Paxport. My answer Mr. Chairman is a flat and unequivocal "no". Intelligence I provided was, I believe, helpful. But as I have already said, it violated no laws or standards of conduct. Indeed, it probably is fair to say that in many cases Paxport's competitors were receiving similar information from their consultants, perhaps even in part from the same sources.
Again, I would like to believe the advice I gave was useful and well-founded, but it was advice always to act within the rules and most certainly within the ethical standards that I shared with my principal client, Mr. Hession as the President of Paxport.
I learned long ago that in this business your reputation is your most important, if not your sole, asset. It has allowed me to continue in business successfully irrespective of the party in power at any time, and I am not about to throw away that asset by being a party to any conduct that could not withstand the scrutiny of any committee like this or any fair-minded person.
Insofar as representations are concerned, it so happens that in this particular case the principal client, Mr. Hession, was a strong and articulate advocate on behalf of Paxport who did not need a lot of help from me in identifying and reaching the relevant politicians and officials. But I did on occasion make supplementary representations to ministers and aids, seldom in this case to officials, none of which were either improper or undue. And I believe I can say that the testimony to this committee by most of those officials would support that assertion.
I would by the way have been happy to tell all of that to Mr. Nixon if he had had the courtesy to ask me.
Mr. Chairman, Paxport won the RFP competition - and from where I stood it was very much a competition - for Pearson redevelopment, not because of my lobbying support anymore than the Matthews group lost the Terminal 3 competition on which I also was an advisor to them because of my activities.
They won for the very simple and uncomplicated reason that thanks to the efforts of Mr. Hession and his team, they submitted the proposal judged by an exhaustive evaluation process, to be in the best interests of the airport, its clients and passengers and the taxpayers of Canada. I would be happy, Mr. Chairman, to try to answer any questions you and other senators may have.
The Chairman: Thank you, Mr. Neville. I believe that Senator Stewart will lead the questioning.
Senator Stewart: Thank you, Chairman. Mr. Neville, at the top of page 5, you make reference to Mr. Nixon and you say that:
The second question is whether or not, in this case, there was anything improper or undue, to use Mr. Nixon's term, in these lobbying activities in support of Paxport. My answer is a flat and unequivocal "no".
Should the committee understand that the expression "these lobbying activities" refers to those lobbying activities of which you have personal knowledge in?
Mr. Neville: It refers first and foremost obviously to my own activities, which are the only ones I can speak to with full and direct knowledge.
Senator Stewart: Thank you very much.
Mr. Neville: I can tell you that on the basis of what I saw, the activities of others including the consultants who appeared here yesterday, I believe the statement is equally applicable to their activities.
Senator Stewart: I have looked at your letter, the letter of August the 17th, 1995, and I gather from that that it is your intention to inform the committee that the only person, either natural or legal, for whom you worked in relation to the Pearson project was Paxport?
Mr. Neville: That's correct.
Senator Stewart: You received no reward or benefit from any other person?
Mr. Neville: That's correct.
Senator Stewart: Nor did you anticipate any?
Mr. Neville: That's correct.
Senator Stewart: You had no reason to expect that if your clients had been successful, either in their original form or another form, that you would receive any benefit of any form?
Mr. Neville: As I said in my letter Senator Stewart, it is a longstanding policy of mine not to operate on the basis of so-called performance or successor contingency fees, whatever the phrase applies to.
Senator Stewart: Thank you.
Mr. Neville: Therefore, I had no such arrangement. I had I guess the possibility that if my client indeed proceeded to be the contractor, redeveloper and operator, there may have been ongoing consulting opportunities, but there were no promises, guarantees or arrangements.
Senator Stewart: Nor any discussions?
Mr. Neville: No. And indeed as it turned out there were none.
Senator Stewart: Thank you very much. I was looking at the Lobbyist Registration Act and under section 5 (1)(f) I gather that what we are really talking about here is
...communicating with a public officeholder in an attempt to influence the awarding of any contract by or on behalf of Her Majesty in right of Canada.
Mr. Neville: Yes.
Senator Stewart: Yes, all right. Thank you. I am looking at a memorandum dated February 2, 1992 from Mr. Hession to yourself. It says, and I quote, you are the overall coordinator - well let me go back a bit.
That organizational chart shows you, Andy Pascoe, John Legate and Hugh Riopelle in the government relations box. In speaking to this, I would suggest that we make clear that:
1. You are the overall coordinator.
2. Messrs Legate and Riopelle are resource persons tasked by you.
Then we have number three deals with what Mr. Pascoe is to do. Four says:
4. You will develop a calendar of lobbying activities for each phase of the effort.
5. You will pull together the message(s) to be delivered at each step in the calendar.
6. You will establish the system of the collection, collation, qualification and dissemination of intelligence (government and competitive) to designate recipients.
So am I correct in gathering from this memorandum that as of February 21, 1992 you were what we would call the consultant- in-chief?
Mr. Neville: Yes, I was assigned by Mr. Hession, who was for intent and purpose, our day-to-day client to coordinate all the government relation activities, and therefore the roles to be played by Messrs Legate, Riopelle and Pascoe.
Senator Stewart: In your letter you anticipated some of the things that you said in your statement this morning. I am looking at page 6 of the where you have described services you provide to a client. I will quote from the letter, page 6 - the letter of August 17:
My consulting services to any client - Paxport or anyone else - consists, first and foremost, of the provision of information, intelligence and analysis on public policy issues of relevance to them and strategic advice on how they, the client, might best represent or pursue their legitimate interests within that policy-making environment. The former is the product of a relationship of trust and confidence built up with a wide range of contacts at both the political and public service levels of government over the past 30 years; the latter depends very much on my ability to be totally frank in assessing the environment as I see it and the possibilities open to the client to legitimately influence the process.
In this case it is the award of the contract.
Senator Jessiman: My letter it is page 2. You said page 6.
Mr. Neville: Paragraph six on page 2, I believe.
Senator Stewart: Yes, I think you are correct, although it does say - I see, that is the fax page. I just did not understand that. Page 2.
Senator Grafstein: Referring to page 2, August 17 letter on the Hession, Neville stationary.
Senator Stewart: Yes. All right. Now, you make reference to your qualifications. I should tell you, Chairman, that I have not seen Mr. Neville for many years, but when I first saw him, he was working for the Honourable Judy LaMarsh. That was about 1965. And then if I remember correctly, he worked for awhile for the Honourable Paul Hellyer. At that time I descended into obscurity. He went on to become famous and to become indeed, the chief, the dean of the lobbyists. How did you acquire your undoubted qualifications?
Mr. Neville: Well, I think if you look at my description of what the services are, I think the qualifications flow directly from that, senator. One is selling, if I may put it that way, basically, one's knowledge of how decisions are made by government and hopefully one's ability to generate information within that system, and therefore, one's qualifications or whether or not one has engaged in activities either in the system or near it would give you some real understanding of how government works.
Senator Stewart: In what you said this morning and in what you said in your letter of August 17th, you say that personal relations is a major component, the people you know and the people who know you, you stick to that?
Mr. Neville: No question, particularly in terms of being able to gather information and intelligence. As I say, it is kind of in the area between what you read in the morning paper and things that should and do remain confidential.
But in my experience, the willingness of both elected and non-elected officials to share information with you - and it is a sharing, quite often you provide them with useful information - is a matter of trust, and that is built up through these personal relationships over time.
Senator Stewart: In this case, were your sources of intelligence - now I am going to give you certain categories of persons; ministers, the chief of staff in ministers's offices, other members of minister's political staffs, members of the public service. Would you say that any one of those categories was most useful to you in gathering intelligence or would you say no, that is not the correct approach. It was just the right person, in other words, someone with whom you had a relationship of trust and confidence regardless of the particular office that that person held, either in the political service or the public service of Canada?
Mr. Neville: Well, first of all I would add to that list for completeness members of Parliament, senators, other people in the lobbying community, even members of the media in some cases, people who make it their business to know what is going on around here. In terms of priority, it would obviously depend on the issue. As you know, some issues are essentially resolved at the political level, others are effectively resolved well below that.
Senator Stewart: In this case?
Mr. Neville: In this case, given Mr. Hession's background and therefore his contact association with ability to talk to officials, in my case the focus was probably more on the political level, obviously more on political aids and ministers just as a practical matter who you can reach at any point and time.
Senator Stewart: In your letter of August 17th, you state that you began working for Paxport early in 1990. The letter engaging you was dated January 23, 1990. Would you say that you started on February 1st?
Mr. Neville: I think my billings actually kicked in as of the 1st of February.
Senator Stewart: Your period of engagement ended at the end of August, 1993?
Mr. Neville: Correct.
Senator Stewart: You say in that letter, you state how much you were to be paid and indeed how much you were paid. It is page 3 of the letter. You were to receive a monthly retainer of $4,000 plus expenses. Now, am I correct in concluding from the use of the word "retainer" there that this was not simply a fee for engagement but this was actually fee for work performed?
Mr. Neville: Fee for services, exactly.
Senator Stewart: And you say that the total amount that you received for performing these services was less than $150,000?
Mr. Neville: Yes. The period covers 43 months, I believe, therefore if you do simple multiplication it would come out to above that. I actually suspended billings for a period during this 43 months because we had assumed this thing would be over in two years, I think, and as you know it took much longer, so at one point I actually ceased to bill them for a number of months.
Senator Stewart: Between February 1st of 1990 and the end of August of 1993 there were periods of activity and periods when the inactivity was so great that you could not in good conscious send a bill. How would you describe - take us through - use this as the basis for analyzing the work that you did. What did you have to do in the period starting February 1, 1990, that which was presumably a period of considerable activity?
Mr. Neville: First so there is no misunderstanding, the decision to suspend billings for a number of months had less to do with the ups and downs of activity than the expressed desire of the client to try to keep down his front end expenses, and I was trying to be responsive to that. But I think this thing went through a number of phases.
Senator Stewart: Your letter says -
Senator Tkachuk: Let him answer the question. We are not in a court of law. This is a senatorial inquiry.
Senator Kirby: Of all the guys to tell us to try to answer the question, it's incredible. He interrupts all the time.
Senator Stewart: He plays the game both ways. He is playing in the corners all the time.
...this project was proceeding at a much slower pace than anticipated by both my client and myself. I actually suspended billings for a period of several months.
Would you explain what you meant by that?
Mr. Neville: Just what it says. I did not bill them my monthly retainer for I think about six or seven months. It did not mean that during that period I provided no services to them. That was the only point of clarification I was trying to make.
Senator Stewart: Are you then saying that although the project was advancing at a slower pace, you were providing roughly the same amount of activity during those several months? I will tell you what I want to get.
I want to get - this is not critical of you or your billing. What I am trying to discover is how your activity and billing relates to the various phases which eventuated in the contract. All right? So what in that early period, starting on February 1st, 1990, were you trying to do? What was your immediate goal? What was the road before you came to the next turn?
Mr. Neville: I will try to answer that, but let me say my billings in terms of the fee level did not change depending on what stage it was in other than the suspension, which I simply mentioned that to try to square the numbers.
I think there were several phases. In the initial phase starting in 1989 as I think the record has already shown, we were attempting as were several others to sell the government on a proposition which would have in fact awarded a contract without a full-blown RFP and competition. It was either unsolicited proposal or a process called contract definition, so there was an initial phase focused on that to see if one could convince the government to go ahead with either you or in some combination with Air Canada for example without a full-blown competition.
That, as you know, did not win approval for the government, so we then entered a phase of trying to convince the government to get on with the RFP, and that was a fairly intensive and drawn out period frankly. And then there was the RFP period, that is the actual filing of proposals, and then there was the post-December '92 negotiations which culminated, in my view and in my case with what amounted to a complete agreement by August of '93 at which time I stopped billing and in effect withdrew from the camp.
Senator Stewart: I am looking at a memorandum dated July 12th of 1990 from Mr. Hession to various persons, Don Matthews, Jack Matthews, Peter Goring, Trevor Carnahoff. And in that memorandum, Mr. Hession reports that he met with Glen Shortliffe on July the 11th, 1990. What post would Mr. Shortliffe have had at that time?
Mr. Neville: I believe at that point he was still the Deputy Minister of Transport.
Senator Stewart: And Mr. Hession goes on to communicate certain information, put following questions to him, and following each question I am showing a synopsis of his answer.
Question number four:
Is there an approved sourcing policy that ensures that no foreign company will directly or indirectly manage and control the terminals?
And the reply is:
This is an important public policy issue that the cabinet will have to decide. He volunteered that some ministers don't agree with our position.
So one of the things that would have to be done at that early stage was to limit the competition so as to exclude foreign companies?
Mr. Neville: Yes, that was an important issue for us in terms of competitive advantage, frankly. There were a number of foreign driven consortia at least looking at the possibility of competing, the principle one being BAA, the British consortium.
It was obviously in our interests to try and limit the competitors. But the second factor involved here and the one I think ultimately won out for us, we were putting enormous emphasis - and Mr. Hession spoke to this when he was here - on Pearson as a way to develop an indigenous Canadian airport development capacity which then could become a major export industry, if you will, in a world market estimated at the time to be about $55 billion. Therefore, we were arguing strenuously for the government not to give away, if you will, this opportunity to build a capability to a non-Canadian controlled consortium.
The Chairman: What were the dates of the interest expressed by these non-Canadian companies such as British Airport Authority, et cetera?
Mr. Neville: I can't be specific, Mr. Chairman. It was going on through this period. Indeed, Mr. Doucet, who will appear before you later this morning I believe - it was fair to say I was involved at one point with that group. They eventually decided not to enter that competition. But they were around and expressing interest up to, if my memory serves me correctly, close to the issuance of the RFP, at which point they made a decision not to compete.
The Chairman: Can you remember the earliest time these expressions of interest began?
Mr. Neville: Certainly during 1991 in the lead up to the actual issuance of the RFP.
Senator Stewart: They were still in until the actual request for proposal?
Mr. Neville: They were in the discussion. They were around town. They put together some Canadian partners. They were expressing interest in competing.
Senator Stewart: Could we return to the memorandum?
Mr. Neville: Sure.
Senator Stewart: It says: "Bill Neville met with Warren Everson the day before yesterday." That would be July 10th of 1990?
Mr. Neville: Yes.
Senator Stewart: "His report follows:" and this is in quotation marks:
I had a full debriefing yesterday (July 10) from Warren Everson re the situation post-last week's P and P meeting.
Refresh my memory?
Mr. Neville: Priorities and planning. It was kind of the inner cabinet model in vogue in the two previous governments.
Senator Stewart: It goes on:
Essentially, Lewis has promised the Prime Minister he will be before cabinet in September with specific recommendations on:
1) runway expansion;
2) short-term upgrades for Terminals 1 and 2 -
Mr. Neville: Should be current.
Senator Stewart: Yes.
- the current $62 million Air Canada program plus some additions.
3) an "efficient" competition process to select a developer for full-scale redevelopment of 1 and 2.
On the latter point, Everson described Lewis as "quite nervous" about any attempt to, in fact, jump over some form of competition to a unilateral decision, even given Air Canada's role ("they are not, you know, any longer a 'chosen instrument' of the government") and the acknowledged advantages in terms of time and dollars of this course.
A couple of questions. Everson went on to list the problems, and I assume that Mr. Hession got that information from you because you were the one who had talked with Everson. You got information on what took place at a policy and planning committee meeting, cabinet committee meeting?
Mr. Neville: The reference is to the situation post. Last week's meeting. I was simply putting the information in the context that there would have known to have been the P and P meeting the previous week.
Senator Stewart: The information you got after the meeting - the situation after the meeting which you attempt to describe here would not have been the same as if the meeting had not taken place?
Mr. Neville: I can't answer that, senator. It is a long time ago. But my recollection - as I say, this is a long time ago - is that P and P meeting there wasn't much of a substantive discussion. It was a brief item simply that Mr. Lewis said he was going to do these things in the future. But that is a vague recollection. What I am saying is that this was not a report on what Mr. Lewis told ministers of P and P or any cabinet discussion. It was Mr. Everson's assessment of the situation, and I simply was locating it in time as an assessment following a P and P meeting that was known to have occurred. There was no secrecy as to when P and P met.
Senator Stewart: I see. Reference is made here to Air Canada. Were you working for Air Canada at that time?
Mr. Neville: Let me just check. I don't believe at that time. I went back and looked at my files. Let me just see here. I did work for Air Canada on another subject. My relationship with Air Canada began in September '91.
Senator Stewart: This is '90.
Mr. Neville: No, I did not.
Senator Stewart: Starting some time in '91 you were working for Air Canada. They paid you - what was it?
Mr. Neville: They have testified in another place I believe that they paid me $10,000 a month.
Senator Stewart: Let me read what Mr. Morrison testified in the Committee of Transport in the House of Commons. It is 8:8, 31-05-94,
Mr. Morrison: Sorry. Our arrangement with Mr. Neville was in general advice and it was for $120,000 a year. That has been in place for some four years for general advice, monitoring and guidance.
So you did not find that there was any conflict between -
Mr. Neville: As I say -
Senator Stewart: Let me finish - between being retained by Air Canada on the one hand and being retained by Paxport on the other hand?
Mr. Neville: For the record, my relationship with Air Canada began in September '91 and terminated in August '94.
Senator Stewart: At the same time that your relationship with Paxport terminated?
Mr. Neville: That terminated a year earlier. This is '94, last summer.
Senator Stewart: Quite right.
Mr. Neville: My relationship with Air Canada was focused entirely on what was known as the airline structuring issue. That is a very heated debate that was going on at that point about the future shape of the Canadian airline industry, and particularly issues involving the sale of equity and Canadian airlines to American airlines, possible merger between the two airlines, et cetera. That was totally the focus of that relationship.
When Air Canada approached me in the summer of '91 about a relationship with them I told them up front, it was a matter of public record anyway, that I was engaged by Paxport on the Pearson matter and therefore that was specifically excluded from my relationship with them.
Senator Stewart: Staying again with the memorandum, July 12th, 1990, on page 3 of the memorandum under number four, there is mention to something you referred to earlier, heavy pressure from other potential bidders and you go on in the next paragraph,
Between now and September, Lewis is supposed to negotiate -
Almost sounds as if he was acting on behalf of someone.
- to negotiate the key points with other interested ministers, principally Mazankowski, Wilson, de Cotret and the PMO.
For what minister do the letters PMO stand?
Mr. Neville: That is the Prime Minister's office, and in this case it was a reference to checking, as I understood it at the time, the result of discussions with those other principle ministers with the PCO prime PMO before this matter came back to cabinet.
Senator Stewart: It couldn't mean the Prime Minister himself? PMO is not used here to mention the Prime Minister?
Mr. Neville: It is the office surrounding the Prime Minister.
Senator Stewart: To mention the Prime Minister himself would not be proper. You refer not to God but the deity. That is not what is being done here. You must not mention God? The reason I say this it says "other interested ministers" and the PMO is other interested ministers, so I am driven to the conclusion that it may be God.
Mr. Neville: Perhaps a second dash dash should be after de Cotret and PMO.
Senator Stewart: Note that amendment please. Farther down it says:
Back on the central issue, it is clear at this point that Lewis of his own accord is not prepared to move unilaterally to award development to Paxport/Air Canada. He will have to be pushed/ordered - which, I guess, begs the question whether that is smart strategy, even if it is doable. I have my doubts.
As to how an "efficient" competitive process might work, Everson says they are still interested in the CDIC model of overall once-removed management with MOT itself providing the support and policy issues and the manager able to tap non-governmental sources for support in vetting financial and legal options.
So at this point you were concerned to assure that the foreign competitors were out, that unfortunately Mr. Lewis was not prepared to move unilaterally to award development to Paxport/Air Canada. If that was to be done, he would have to be pushed, shoved and there were doubts that this would be proper. But then the possibility would be an efficient, competitive process. Why is the word efficient used with a special meaning there?
Mr. Neville: I do not think it is in special meaning.
Senator Stewart: Why is it quoted?
Mr. Neville: I wanted to make sure that the recipient understood that it was Mr. Everson's word and not my own.
Senator Stewart: It wasn't underlined, it was quoted. Over on the next page:
We must, therefore, maintain the intensity of their efforts and, I believe, broaden their scope to include full cabinet and caucus.
What were you trying to achieve with full cabinet and caucus?
Mr. Neville: This is Mr. Hession speaking. My quote ended at the bottom of the previous page.
Senator Stewart: Would you disagree with what he is saying here?
Mr. Neville: No.
Senator Stewart: "We need to sharpen our arguments with more facts and deal with misconceptions."
Mr. Neville: I will not disagree with his advice. I probably discussed it with him before he wrote this.
Senator Stewart: You probably discussed this?
Mr. Neville: I probably discussed the content of this memo to Mr. Hession before he sent it. Certainly would have agreed with the advice contained in it.
Senator Stewart: You mentioned earlier various phases in this campaign, excluding competition, making sure that there was an efficient process and then reducing foreign ownership. You did not suspend billings after the proposal had been submitted, or perhaps we go back a step. You didn't submit - I think we are traversing this ground that you covered before. You didn't stop working when the request for proposals came out?
Mr. Neville: No. It was in the months prior to that. There was a considerable gap in time between Mr. Lewis's rejection of any kind of non-competitive solution, if you will, and the actual issuance of the RFP. And it was during that time frame, as I recall, that I suspended billings, but I continued with perhaps a little less intensity to contribute to the client's file.
Senator Stewart: After the request for proposals had been made, what was there for you to do?
Mr. Neville: After the request for proposals were made?
Senator Stewart: The government had defined what it wanted and the process was fair to everyone at that point. You were not an engineer. You couldn't help design the proposal. What would you be doing?
Mr. Neville: First of all, the rules are quite clear that those actually involved in making the decision are off-limits, but there is no rule under prohibition that I am aware of that prevents one during that period from briefing other interested parties on the major elements of your proposal. Mr. Hession - most of which was done by Mr. Hession - had a fairly active program of briefing MP's of all parties I might emphasize.
Senator Stewart: Minister's, chief's of staff?
Mr. Neville: Most of that had been done by that phase. I think there was a lot of work done with Mr. Pascoe in terms of municipalities, businessmen, et cetera in Toronto, I contributed to the development of materials for use in that kind of a program, i.e., what are the best kind of ways to present our case and the essence of our proposal?
But in terms of lobbying intensity, I agree, once the proposals were in and the evaluation process was underway, one couldn't talk to decision-makers and one didn't try.
Senator Stewart: Did you think that the process - to use that famous word efficient - do you think that you achieved an efficient process?
Senator Jessiman: Efficient and competitive.
Senator Stewart: It says efficient, competitive process. Did you achieve an efficient, competitive process with the limited number of racers who were eligible to go on the track, for practical reasons were eligible. Foreigners out. We were told by Price Waterhouse yesterday that the number of racers, the number of competitors was very small. The officials would have known the various qualifications, financial and otherwise, of the competitors. Were you able to influence the evaluation process in such a way as to assure that your racer, your client, was not excluded by reason of financial incompetence?
Mr. Neville: No, that was not an element. First, let me answer your question. Did we achieve an efficient process? Yes I think the answer is. The only aspect of that process around which there was any discussion was the length of the response period. Matter has been discussed before this committee before, and I think it is known my client, having done the most prepatory work for obvious competitive reasons, favoured the shortest possible period. So we wanted no more than 90 days.
In the end, other interested parties succeeded in convincing the government to lengthen it. But that was the only specific of the evaluation process that I recall having any lobbying activity around, if you will.
Senator Stewart: You were convinced, and I guess the outcome as of December 7th confirmed your conviction that given the nature of the evaluation process, Paxport had a real chance of winning?
Mr. Neville: It had nothing to do with the nature of the evaluation process. It was the same for everyone. I was confident they would win because I was impressed by the quality of the application presentation.
Senator Stewart: It was known that Claridge had lots of money.
Mr. Neville: If the government was going to decide on the sole issue of whose pockets were deepest, we would be at a disadvantage.
Senator Stewart: I go back to an analogy I used yesterday, if the question is who can design the most elegant ship, the one that can promise the most jobs in Toronto, and put aside for the moment at least the question of financing, then surely that produces what from one viewpoint what might be regarded as an efficient evaluation process?
On the other hand, if you have to produce a ship that will be seaworthy financially, the evaluation process would be designed otherwise.
Mr. Neville: First of all, there were other evaluation criteria formally and informally including the return to the Crown issue which was important.
Senator Stewart: But if the ship sinks -
Mr. Neville: I do not claim to be here as a financial witness, but given Paxport winning the contract, it was never - and I do have financial services clients, so I talk to people regularly who know these things, there was never any doubt in my mind that given the contract this thing was financeable by Paxport.
Senator Stewart: So get the contract first then financing?
Mr. Neville: Paxport was a consortia of companies who were not without resources, but even beyond that, given the contract, obviously a banker or a financier would look at this as something that was financeable.
Senator Stewart: Nevertheless even before Christmas of that very year, it had been appreciated that your ship, if I may confer title or rights upon you, it needed a big financial patch?
Mr. Neville: That is your assumption, senator.
Senator Stewart: Is that not the facts?
Senator Jessiman: That is not correct.
Mr. Neville: I was out of the loop at the time senator, but it occurs to me - and I don't know that this is a fact but since we are all speculating at this point - that there could have been more factors than simply the financeability issue that encouraged the merger. As people keep saying, Claridge was already there in T3. The issue of competitive terminals versus overall coordinated management had been on the table throughout the piece. That may be in the driver. I ceased to be involved in this file in August, but I have not seen clear evidence that tells me that it was financeability, end of discussion.
Senator Stewart: When did you hear either a reasonably reliable story, report, rumour that a merger would be desirable?
Mr. Neville: I think perhaps Mr. Hession briefed me on some signals he was getting from the government in December of '92.
Senator Stewart: From the government?
Mr. Neville: He has testified before this committee that he got a call from a senior public official.
Senator Stewart: Yet we are told that the government knew who the runners were, the players even months before which means they would have known the qualifications and now the government suddenly discovers that Paxport needs money?
Mr. Neville: I am simply repeating to you what the evidence is before the committee.
Senator Stewart: Let me shift to something else. I am boring the chairman inordinately. Did you continue to bill Paxport until the end of August, 1993? Did you serve on the transition team for the government which replaced Mr. Mulroney's government in 1993?
Mr. Neville: I did. On a voluntary basis I assisted Ms Campbell with transition in June of '93.
Senator Stewart: All right. We read Globe and Mail, it is June 18th of 1993 led by veteran Ottawa insider and lobbyist William Neville who - you want to take umbrage at this chairman - who handled the job for both Joe Clark and Brian Mulroney in their ascensions to power in 1979 and 1984. Ms Campbell's transition team -
Mr. Neville: If you wish to know which is the truth, ask which one of us is in the Senate.
The Chairman: Senator Stewart, on a previous testimony, we had one of your colleagues ask a witness to comment on a newspaper report. Is that what your intention is?
Senator Stewart: No, I will ask the question. Were you on Ms Campbell's transition team?
Mr. Neville: Yes, I was her senior transition advisor.
Senator Stewart: What was involved? I could ask the chairman because he has done this. Was this setting up her cabinet?
Mr. Neville: In general terms, the agenda involved the actual transition arrangements between the changing of the guard, if you will, the restructuring and reorganization of the cabinet and the government that accompanied this particular transition. The appointment of ministers, the staffing of our office and a kind of immediate agenda of activity for Ms Campbell. Those were the major items.
Senator Stewart: Would there have been any discussion as to who would be appropriate to be clerk of the Privy Council?
Mr. Neville: I do not recall that. The incumbent clerk was Mr. Shortliffe and carried on. I don't recall any serious discussion -
Senator Stewart: He was not unsatisfactory, let's put it that way?
Mr. Neville: He had been appointed by Mr. Mulroney and he was an experienced public servant. There was discussion about her office since most of Mr. Mulroney's people were leaving.
Senator Stewart: Did you discuss the disposition of deputy ministers, any deputy ministers who had proven unsatisfactory and who should be supplanted?
Mr. Neville: As part of the transition process flowing essentially out of the reorganization of the ministries that was involved there, there was also a reorganization of deputy ministers and that happened during this period.
Senator Stewart: Could you give us any specifics let's say with regard to Transport?
Mr. Neville: It was during this reorganization that Mrs. Labelle was moved to CIDA as I recall. Jocelyne Bourgon was appointed the Deputy Minister of Transport.
Senator Stewart: Thank you, chairman.
Senator Tkachuk: Good morning witness.
Mr. Neville: Good morning.
Senator Tkachuk: I have a few questions. You mentioned early on in your testimony, Mr. Neville, that you took on the contract with Paxport in February 1990?
Mr. Neville: '89 I think.
Senator Tkachuk: February 1990.
Mr. Neville: I am sorry January 23, 1990. I apologize.
Senator Tkachuk: This contract was taken up because of the T1, T2 - the Pearson airport problem and the potential for business at T1, T2?
Mr. Neville: Yes. I had been involved with part of this consortium, the Matthews Group, in an unsuccessful bid for Terminal 3 private development, and they had retained an interest in airport work. There was evidence around that the government for reasons that have been discussed at this committee would look to private redevelopment to meet the needs of Terminals 1 and 2. It was on that basis that I became reinvolved if you will with a slightly different consortium.
Senator Tkachuk: We have heard testimony about when it was sort of public that things like this were going to happen and that the minister later on that year made an announcement of the potential leasing contract for T1, T2. Was it fairly public knowledge around town? You mentioned British Airways. Were there other interested parties as well?
Mr. Neville: Huang and Danczkay had made an unsolicited proposal. Air Canada had made a number of different approaches to the government. It was clear to every one that there were development needs at Terminal 1 for almost safety reasons and at Terminal 2 in terms of ensuring that capacity was adequate to meet growth projections. It was quite clear the government at the fiscal condition of the moment didn't have the $700 million, so it was fairly easy to come to the conclusion - having done T3, having done LAA's in four cities - that the government had already crossed the river as it were in terms of private development and private operation concepts. Therefore, it seemed fairly clear without a great deal of digging or intelligence that the government was going to, at some point, come to the notion of private redevelopment of these terminals.
Senator Tkachuk: This was a full two years - I am repeating this point because it seems that I have to make it over and over again so bear with me, Mr. Neville. One of the companies that was part of the consortium of Paxport AGRA Industries?
Mr. Neville: Yes.
Senator Tkachuk: Where are they from?
Mr. Neville: I think their head office is in Western Canada.
Senator Tkachuk: Yeah, they are. At that time it was in Saskatoon, and now I will repeat for the third time in Calgary. So this possibility of this deal now is known all the way from Saskatoon to London. Certainly not a secret amongst people who want to play in this league?
Mr. Neville: Not at all. And it was not a large community as has already been said. There are not 50 consortia capable of doing large scale airport redevelopment, certainly not in Canada and probably not internationally.
Senator Tkachuk: So the object really of Paxport was to get a head of steam going and organize themselves so if there is an announcement they would be more prepared than anyone else?
Mr. Neville: No question. Indeed as I said, in the earliest phase one took the best cut as to whether or not one could get this contract on some basis without a full fledged competition. And therefore one did a lot of up front prepatory work. There was no question - I think the facts bear this out - that one of Paxport's advantages, at least up to the RFP was that they had done a lot more work and made a lot more front end investment than any other potential and real bidders.
Senator Tkachuk: The question of the 90 days was based on the fact that the company was hopefully more prepared or your client was more prepared than the other people in the field. That is what you believe?
Mr. Neville: We had no illusions that Claridge, given their T3 experience, was going to produce a competitive proposal within those time frames. But for us, in terms of anyone coming back in the case of BAA or somebody putting together a new consortium, clearly the shorter you could hold the time frame the better in terms of our competitive position. The 90 days is no rush job. It was kind of the normal. We wanted to hold it to nothing more than the standard.
Senator Tkachuk: We have heard in testimony that there were others outside of AGRA, outside of Matthews Groups, there were a number of companies involved in Paxport. And we are focusing on the Matthews group. I am going to ask you, your contract was with Paxport Management? There is a lot of Paxport's around and I just want to make sure -
Mr. Neville: I thought it was Paxport Inc., but let me check that.
Senator Tkachuk: This letterhead says Paxport Management. The memorandum of -
Mr. Neville: Paxport Management Inc.
Senator Tkachuk: With Paxport Management Inc, and then there was Paxport Inc. itself I believe we have heard in testimony, and I am going to ask these people when they get here just to repeat it.
Mr. Neville: I will watch with interest.
Senator Tkachuk: We have also heard Mr. Hession testify about a company called Paxport International.
Mr. Neville: I am aware of that.
Senator Tkachuk: All different companies with different roles?
Mr. Neville: Yes.
Senator Tkachuk: In your efforts as a consultant and a lobbyist during this time period, were there other lobbyists involved on this file along with you, other companies?
Mr. Neville: There were two. The individuals mentioned in Mr. Hession's letter to me, that is Hugh Riopelle and John Legate who are both one person consultancies, and Mr. Pascoe, who again was a one person consultancy and whose terms of reference were restricted to Ontario and Metro Toronto region. And laterally, any relationship that was outside of my coordination, as it were, the Matthews Group I believe it was - I am not positive now - also retained the services of Mr. Doucet's company.
Senator Tkachuk: Did you coordinate your efforts with him or was it separate?
Mr. Neville: Mr. Doucet? He was outside of - or separate from I guess is the more correct term - the kind of coordinated group that we had set up in reference which was made in that February '92 memorandum. There were one or two occasions as I recall it. My memory is - and he will testify to this I guess - is that he didn't get involved until something close to '93 I think. During that period - and I left this file in August of '93. In that period there were one or two situations where I remember he and I participated in discussions with our mutual client.
Senator Tkachuk: On the file itself you mentioned - maybe it was the witnesses yesterday afternoon - you would not restrict yourself or your efforts to communicate your proposals just to the government in power, but through other political parties?
Mr. Neville: Yes.
Senator Tkachuk: The Liberals?
Mr. Neville: Yes.
Senator Tkachuk: The NDP?
Mr. Neville: Yes.
Senator Tkachuk: Did you focus your efforts on Liberal members?
Mr. Neville: Let me first say that most of this contact was done by Mr. Hession in his role as President. I had some role in some cases organizing meetings or preparing some materials for him, but the focus was on Liberal members of Parliament from the Metro Toronto area who had an obvious interest in what happens at Pearson Airport. And I believe Mr. Hession met - I think his diaries that you have will show this - met with most of the active Liberal members from Metro and also with the appropriate critics if you will, Liberal Transport critic, I believe the Finance critic as well, to brief them on the project.
And again my recollection is the NDP didn't have any members in that region, but Ray met with the Transport critic at least of the NDP.
Senator Tkachuk: The Liberal members at that time, some of which have become cabinet ministers, did they raise objections to the fact that Jack Matthews - or I am sorry that the Matthews Group was sort of the lead company? God forbid a Tory?
Mr. Neville: Not in my presence or in any debriefing that I received from Mr. Hession. Indeed, my recollection is - again some of this is secondhand, I wasn't at all these meetings - was Mr. Hession felt he got quite a positive reception from the Liberals he spoke to who agreed to a need to deal with the terminal problem and felt we had a good proposal and approach to dealing with it.
Senator Tkachuk: There might have been some Liberals actually in the partnership of Paxport?
Mr. Neville: Certainly there were. Ellis-Don was a participant in the consortium who is - as much as companies have political identifications - I do not think is identified as particularly Tory.
Senator Tkachuk: I am not into rumour mongering like others around.
Mr. Neville: I thought you worked once in the consulting business?
Senator Tkachuk: I think that perhaps the owner of AGRA may also have been a Liberal or maybe even knew some of the leadership of the Liberal party today?
Mr. Neville: That is possible, I gather.
Senator Tkachuk: That would not have disqualified him from the contract obviously. Do law firms have to be registered if they are participating in lobbying activities?
Mr. Neville: If they fall within the provisions of the act, i.e., if they are making direct representations to the government on behalf of a client except in certain very exempt situations such as dealing with an individual's tax or personal affairs. But if a law firm is acting on a corporation or even an individual's behalf on a public policy matter, they are subject to the same rules as the rest of us.
Senator Tkachuk: Would you know if the firm of Lang, Michener has ever registered with the lobby registry?
Mr. Neville: On this or on anything?
Senator Tkachuk: On anything?
Mr. Neville: I think I have seen their name registered on some issues. I don't recall them being registered on this one, but I think I have seen their firm registered in the past.
Senator Tkachuk: You have to register for a specific task as well as register as a lobbyist, is that what it is?
Mr. Neville: The requirement is that you register the name of your client, the individuals in your firm who are involved in it, and under the previous rules at least by sort of check a box formula, the subject matters which generally were represented, departments that you were interested in and the kinds of activities, i.e. making representations, arranging appointments to involve a contract or public policy, trying to get a bill amended, regulations, that type of activity is listed and you check boxes. That in the last go around that has been refined.
At the time this was going on, the requirement was to register your client, the principle contact there, the departments or subject areas on which you were going to be active on his behalf, and the kind of activities that you would engage in on his behalf. If you don't make representations, i.e. if you are purely informational or advisory, you don't have to register.
Senator Tkachuk: Lang and Michener were Paxport's lawyers at the time.
Mr. Neville: I believe they were in part. I don't know whether they were solely, but I think they were in part, yes. But that in itself would not require registration, at least in my view.
Senator Tkachuk: Unless they were doing a little work on the file, but we will leave that for them, I suppose. It was mentioned earlier on about Mr. Shortliffe, the Clerk of the Privy Council. He was the clerk during the short Campbell regime?
Mr. Neville: He was.
Senator Tkachuk: Was he not also the clerk during the time of the Nixon report?
Mr. Neville: I believe he was the clerk through the sort of transition phase of the current government, and therefore I think that encompassed the appointment of and receipt of the report of the Nixon inquiry.
Senator Tkachuk: I believe he was until February of 1994 actually.
Mr. Neville: I believe that is the case.
Senator Tkachuk: So we have Mr. Shortliffe who was the Clerk of the Privy Council during the time of Mulroney towards the end of Campbell, and also during the time of the Nixon report?
Mr. Neville: At the front end, he was the Deputy Minister of Transport when a lot of the policy related issues germane to this file were dealt with, and including even in the early stages of this T1, T2 itself, so he had a lot of background and knowledge and history of these issues.
Senator Tkachuk: So he was the clerk during the time when the contract was signed and he was the clerk during the time when the contract was cancelled? Pretty influential guy.
I do not have too many more questions. As a matter of fact I don't have any right now, Mr. Chairman, so I will just pass. Thanks, Mr. Neville.
The Chairman: Senator LeBreton.
Senator LeBreton: Thank you, Chairman. I ask the same question yesterday of Messrs Near and Fox. This particular transaction, T1, T2, has been described as intense and by intense Mr. Fox described that as intense media. We all knew that. Intense pressure on the part of lobbyists. You are one of the deans of this business here in Ottawa so in your 25 years in the consultant business, how did this particular effort compare with some of the others you might have dealt with under this government or previous governments?
Mr. Neville: It was intense in that there was a lot at stake for the bidders here. This is a very large project. But comparably speaking, I would not rate the activity that I saw and certainly that I carried out or participated in around T1, T2 as any more intense or aggressive or whatever you want to call it than I had seen in many other similar procurement situations, not only under that government but under its predecessors and including Transport related situations that I had seen again under both governments. So I think the notion that this was a uniquely intense lobbying situation simply is not supported by experience certainly by those who are around it, just to make one comment.
I mean in the Terminal 3 contract negotiation one bidder, eventual winner, employed as I recall something between 7 and 10 consultant firms alone which must be some kind of a Guinness Book of Records number as far as I know, but the numbers involved in this intensity of the activity is nothing unique or particularly exaggerated about them. Certainly it was a very competitive situation, but why not?
Senator LeBreton: You are obviously referring to the firm who won the Terminal 3 Huang and Danczkay?
Mr. Neville: Yes.
Senator LeBreton: Any other examples that you can think of?
Mr. Neville: Under the present government I can think of the CATS program. I can think of -
Senator Grafstein: I am sorry what program?
Mr. Neville: CATS. Contract as it happened is continued to have its problems but it was a new era of traffic control system, contract that eventually went to Hughes and some related companies. Under the previous government I remember some fairly intense and controversial activity around such things as the awarding of duty free shop licenses at airports, the acquisition of land and other related contracts involving the ultimate development of the International Airport at -
Senator LeBreton: I had not thought of the duty free but I have often said -
Mr. Neville: When millions of dollars are on the line it is competitive in private business and in public procurement contracting as well.
This one was not unique and, indeed, I would rate it down on the list of scales of intensity compared to some other ones that I personally have been involved in.
Senator LeBreton: On the duty free, I hadn't remembered it until you mentioned it, but I have often said, "Oh, if we only had access to information under Sky Shops." In any event, that is my -
Mr. Neville, Senator Stewart raised this question, a similar question, and Senator Tkachuk also alluded to it. Much has been made of the RFP and the 90 days although, as you point out, that is sort of - I one time saw an average of 81 days - and that this did not give other interested parties enough time to put together a proposal or a bid. It is my opinion, and it is certainly shared by some of the witnesses we have had here, that it was certainly no secret that the government was planning to go to the private sector. And, indeed, there was an official announcement made on October 17, 1990 that the government would seek private sector participation in the modernization of T1 and T2. And, indeed, it was 17 months before the issuance of the request for proposals. Once issued, the RFP was for 90 days.
My question is: Did you view the - you have already stated your interest in 90 days - did you view the RFP period of 90 days as too short to allow other competing bids in?
Mr. Neville: I think one might have made an argument to that affect if (a) this thing came out of nowhere. As it were, if there hadn't been as much advance notice of it. And, secondly, if it was credible to believe that there were potential bidders out there who might not have been aware or hadn't come together, the truth is this is a highly specialized field. When you looked at the two consortia that eventually bid for it and the potential bids by people like BAA, you covered the field in terms of known expertise in this area.
So, no, in those circumstances - first of all, as I say, that is a fairly normal time period in RFPs that I have been involved with, regardless of how much advance notice.
Secondly, in this case I think it was more than adequate. As it turned out, thanks largely to representations made by Claridge, I think, the period was extended beyond that.
But I don't think it is a fair complaint that that is somehow a short - overly short period in the circumstances.
Senator LeBreton: Actually, it ended up being 127 days.
Once the proposals were in, they went to an arm's-length evaluation process, and we have had testimony from Mr. Lane who headed up the evaluation team, and he stated that there was no lobbying efforts around their - no lobbying around their efforts. I believe you indicated the same. What does a consultant firm normally do in this period of time?
Mr. Neville: Frankly, in most cases, if you haven't done what you needed to do by then, it's over anyway. It is a well- established rule, nothing unique to this process, that once the formal, legal RFP process is in motion, and once applications are in, that one does not try to lobby any of the decision makers. And, indeed, one would get - I think the contract documents almost provide that - or the RFP documents, I should say.
So, as I say, if there are removed parties who are interested but who are not going to bear directly on the outcome, one might spend some time communicating with them. That happened in this case. But, in most situations, in a lobbying sense, when you reached that stage the game is over, at least until some decision is announced and one assesses whether there are opportunities flowing out of that.
Senator LeBreton: That is all I have, Mr. Chairman.
The Chairman: I have no other - Senator Grafstein.
Senator Grafstein: These are questions arising out of your earlier testimony, Mr. Neville. Again, as Senator Stewart stated, Mr. Neville's relationship and mine goes back to exactly the same time period when he served in a capacity as an executive assistant to a cabinet minister and I did during that same government. I just wanted to state that so that people will understand that basis.
You were involved in Terminal 3?
Mr. Neville: Yes, I was.
Senator Grafstein: In the Terminal 3 procedure there was an expression of interest period. I think the chronology is somewhere between 90 and 100 days for that, and then the request for proposals. If you were not acting for an applicant who was so intensely involved because the Matthews group, as I understood, was involved in Terminal 3, so it has almost been a continuum for them.
Mr. Neville: Right.
Senator Grafstein: Lay that aside. I am talking about for third parties not in the loop.
Had you been acting for them, and I am asking you now in your capacity as a consultant, would it not be reasonable for somebody to deduct that when the expression of interest process was dropped that this was going to be a smaller and a tighter field? I am talking about somebody like BA in Britain or the Hong Kong group. There was a tremendous amount of competition around the same time with respect to people, including Canadians I believe, who were involved in the Hong Kong exercise. There was a number of international organizations in Germany - not in Germany. I think there is one in Germany. I think there is two or three in Britain. There are a number of players, global players, and lay aside the limitation with respect to foreign ownership because that wasn't evident, obviously, until the RFP came out.
Isn't it reasonable to expect that once that is dropped that this looks like a tight field and it would take a prodigious amount of effort and a prodigious amount of time to catch up?
Mr. Neville: Well, I understand what you're saying. While there was no formal expression of interest process in this, there was certainly, I think, what qualifies as an informal expression of interest period. As I say, there were a number of groups during that time who were at least making preliminary inquiries in terms of those that would - in which foreign participants would be the controlling factor either in terms of equity or operational control. That was obviously an issue.
I think it fair to say that they were probably getting negative signals from the government before the formal RFP was issued. So, as a practical matter, I don't see any evidence that any potential bidder backed off or was discouraged by the lack of a formal expression of interest phase, particularly given that, as I say, most of the players had gone through - many of them through the T3 phase, knew the - were comfortable dealing with the Canadian government and therefore didn't - perhaps didn't need that phase in this case.
Senator Grafstein: Just based on - there is a bit of, I think, debate between the various senators on this issue, but everybody agrees that it is large, this project was large. Everybody agrees that it was complex. Everybody agrees that it was difficult. This was really a singular, a singular contract, or singular negotiation in Canadian history in the sense that Pearson is by a significant degree the largest franchise, if you will, in Canada.
Mr. Neville: No question.
Senator Grafstein: Compared to all others.
Mr. Neville: No question.
Senator Grafstein: So in that sense it was a singular event.
Mr. Neville: Yes.
Senator Grafstein: Now, back to the process. We have had evidence now from those consultants in government outside of the concern that the process had to be extended because of the complexity of the matters that the government had to deal with. We have had that from memoranda, both in the government and from those consultants - or at least one consultant outside the government who was concerned about the timeframe. And then we have evidence that on his own account Minister Corbeil decided that he would forgo the expression of interest process and go directly into the RFP. That is all on the record.
Senator Tkachuk: The first part was; the second part isn't.
Senator Grafstein: My question to you is: Were you involved, or to your knowledge was anybody involved on your side, from suggesting to Minister Corbeil that this would be the appropriate route to go, on the basis of your earlier testimony where you said that you were trying, quite rightly, on behalf of your client, to in effect narrow the field?
Mr. Neville: I do believe from recollection that the so-called two stage versus one stage process was one of the issues around which there was discussion with various affected officials, including probably the minister. There is no question that my client's position was that one didn't require, given all the circumstances we have talked about, an expression of interest stage at this - for this contract.
Senator Grafstein: Finally, Mr. Chairman, if I might, the role of Mr. Doucet - you have told us that while you were the chief quarter-back, if I will, of all the consultants on the Paxport cum consortium team - Mr. Doucet had a separate or different role that you were not fully cognizant of, although from time to time you have said you were in contact with him. What was your understanding of what his role was separate and distinct from the role that you were providing or coordinating?
Mr. Neville: I was simply making a point that if you look at the February 1992 memorandum of Mr. Hession to me about government relations and the government relations box, as he described it at the time, Mr. Doucet's name was not in that box because at that point he was not on contract to Paxport or Matthews, to my knowledge, and therefore wasn't part of this group. And I was only saying that the coordination role set out in that memo and dealing with those individuals didn't apply to Mr. Doucet. He wasn't there at the time. I think it was almost a year later when he came in, a decision made by the principals with no particular consultation or involvement by me, and I don't say that in any pejorative sense, I mean simply the facts are they made the decision, which is clearly their right, to hire another consultant to help them in that phase and they hired him. I don't know what his specific - he is here, he will speak for himself. I don't know what his specific terms of reference were or arrangements.
But I did, once he did come on board, as I say, my recollection in the first half of '93 there were occasions when the two of us together talked to Mr. Hession and I guess, on occasion, to other members of the group.
Senator Grafstein: I am trying to contrast the consulting efforts on behalf of your client with respect to the one we heard yesterday and what we heard yesterday that - was that there was a total coordination of all the parties and there were a number of consultants, but they were all seemed to be, based on the memoranda we had before us, coordinated, whereas this one - your side seemed to have two parallel activities here, one - and we will hear it from Mr. Doucet, but I just want to know from your knowledge or information what was happening out there because you are a superb expert, and I acknowledge that, and one of the leaders of this industry, if you will - forgive me if I add a personal thing - superb when it comes to the gathering and the control of information. You like to know what is happening.
Mr. Neville: Thank you.
Senator Grafstein: Some of us suffer from the same deficit. I can't understand - and I am curious, it is more curiosity than anything, that here this magnificent effort on the one hand and this - another effort, which we will hear about, over here. I just want to know from your perspective this couldn't have made you feel very comfortable, or did it?
Mr. Neville: It didn't make me feel uncomfortable. Understand, as compared to the witnesses you had yesterday, I am what is known in this kind of business as a kind of boutique. I mean I am essentially a one person firm. I had a second consultant who worked with me at the time. So therefore I don't have the resources in the body count, number of offices, et cetera, that an Earnscliffe or a Capital Hill group or many of the others have. Therefore, it is not unusual in my business for clients to have other consulting relationships as well.
The fact that this was not done within the box, to use Mr. Hession's 1992 phrase, I don't think had any sinister, pejorative meaning to it.
Senator Tkachuk: Could I raise a point of information? When did Mr. Doucet come on board? Because you said "parallel" so I just want to know what you meant by that.
Senator Grafstein: I think there was an overlapping here. December the 20 - the information that I have, and we will get it from Mr. Doucet -
Senator Tkachuk: That would be good.
Senator Grafstein: - it would be the end of December 1992 to March the 25th, 1994, but the dates are not clear. In other words, I haven't got the precise dates, but that is the best information that we have, but we will get it from Doucet. So I am trying to develop it here and then we will be able to compare the notes.
Senator Tkachuk: So if there is any parallel it would be into 1993, not 1992 or 1991 or 1990.
Senator Grafstein: No, 1992. He registered in 1992 but there is a requirement for registration that takes place not simultaneous to the question: What time prior to that time was he engaged?
Senator Tkachuk: Okay. That would be a good question to ask him.
Senator Grafstein: I am just trying to find out the time frames. You are quite right, it is all factual.
Just a couple of other topics, Mr. Neville. We have heard from Mr. Near yesterday that at the outset, very early on in his consultancy he tried to determine what the flow was going to be, who was going to carry - who was going to, in effect, coordinate this, and he discovered in a conversation that he had with Mr. Segal that this file essentially would be coordinated or dealt with or - I don't want to put words in anybody's mouth because I haven't got the text in front of me - but in a sense the carriage of this would be PCO. You have mentioned - that was his testimony and I am not trying to - that was the result of what he said.
Now, you have mentioned in your file the - you have talked about PCO, but you have essentially seemed to focus on PMO. Difference or was there a different - were you getting your information differently than he was getting as to how this was going to be coordinated?
Mr. Neville: No. I think he was - again, it is not for me to testify for Mr. Near, but as I recall the context of the discussion he was talking in the sense of who was going to take an interest in terms of the apparatus around the Prime Minister. Sometimes it is the Prime Minister's Office; sometimes it's the PCO, which is his department if you will. In this case, for the reasons Harry dealt with, it was the PCO. That is what I heard him saying; not the PCO versus the Minister of Transport.
Senator Grafstein: But your memo seemed to talk about the PMO.
Mr. Neville: Well, I used it as a generic term. My recollection was that at the time I wrote the memo at least, which is '90, that inasmuch as there was interest at the centre, it was all process related questions at that time. I recall talking to both offices infrequently but occasionally.
Senator Grafstein: Thank you, Mr. Neville. Thank you, Mr. Chairman.
Mr. Neville: That was prior to Mr. Segal's arrival, by the way.
Senator Grafstein: Yes, I understand that.
The Chairman: Senator Jessiman.
Senator Jessiman: Thanks, Mr. Neville. Are you familiar with the P.E.I. project, the bridge?
Mr. Neville: The bridge?
Senator Jessiman: Yes.
Mr. Neville: I wasn't involved in it as a consultant, but I have a general awareness of it.
Senator Jessiman: Did you know in that particular project that they didn't require your proof of financing before you made a bid?
Mr. Neville: Yes.
Senator Jessiman: It is only the winner, once he has won the contract, then he had to prove financibility. Did you understand that?
Mr. Neville: Yes. For what it's worth, my experience is that most times when governments make procurement decisions the technical decision is that this is the best bid received and this is the group who we are going to try and negotiate a final agreement with.
There is always - the government always leaves itself a little out, i.e. "If we don't sort out the details appropriately, we are going back to some other drawing board." So that was - in the sense that they didn't hand Paxport a contract on December 7th, that was nothing unusual. It is a standard practice as far as my experience goes.
Senator Jessiman: And Paxport complied with the request for proposals as far as project financing was concerned, which is found in 2.12(iv), and I am just going to read it for the record:
Proposals shall include a description of arrangements for the financing for all elements of the Project.
Proponents will not be required to demonstrate at the proposal stage that financing is in place but should be aware that the Developer will be required to provide evidence of the availability of financing before any agreements or leases are concluded.
Correct?
Mr. Neville: Correct.
Senator Jessiman: You also complied with the financial resources, which is found at 5.2.3 on page 37, and I will read part of that into the record.
Conceptual studies suggest that the short to mid-term development of the Terminals' facilities could require investments in excess of $500 million. Commercial developments would increase the level of investment. Proponents must demonstrate financial planning experience and the financial capability necessary to undertake the proposed Project. Proponents should submit evidence of the ability to raise equity/debt funds on a favourable basis, including names and addresses of credit references.
Financial statements including a cash flow statement (audited if available) of the lead member and anyone who has an ownership interest in the lead member are to be submitted, showing the assets and liabilities including contingent liabilities, all in accordance with generally accepted accounting principles as established by the Canadian Institute of Chartered Accountants.
And that you complied with?
Mr. Neville: My client did.
Senator Jessiman: Yes, that is what I meant, not you.
Now, you were awarded the contract -
Senator Kirby: No.
Senator Grafstein: You told us that yesterday. Be careful, senator. From your own mouth, be careful.
Senator Jessiman: I hope that the government will get around, after we are through here, to actually giving them the contract.
Senator Grafstein: Since you corrected us, I think you should correct yourself.
Senator Jessiman: And save the government and the taxpayers of Canada millions and millions of dollars.
The Chairman: That is not the purpose of this inquiry, senator.
Senator Jessiman: All right.
You said in your statement that you filed with us and you have read that Mr. Nixon didn't call on you to give evidence. Do you know if he called on any other of the consultants or lobbyists, as he calls them, to give evidence?
Mr. Neville: Not to my knowledge, and I specifically asked a number of them at the time.
Senator Jessiman: All right. I don't know if you have any knowledge, I don't at this time, and we are certainly going to have to ask Mr. Nixon, do you know - did anyone tell you, have you heard even in the grape vine in Ottawa what his terms of reference were?
Mr. Neville: His terms of reference?
Senator Jessiman: Yes. Do you know what they were?
Mr. Neville: They were published, I believe. They are in the front of his report. It was an inquiry established under the Inquiries Act, I think.
Senator Jessiman: No, I don't think it was.
Mr. Neville: Then I'm mistaken. There is certainly a press release announcing his appointment, and I thought it described his terms of reference, but I may be - I don't have the documentation with me.
Senator Jessiman: Okay. I think I know what the answer to your question from reading your brief, but as you know from yesterday there is a part in this report of Mr. Nixon's on page 9 which has to do with the role of lobbyists. I want you to answer these questions on the knowledge you have about your own firm and any of the others, the ones that you know about.
This is what he says, and I want to ask you whether you agree with this.
It is clear that the lobbyists played a prominent part in attempting to affect the decisions that were reached, going far beyond the acceptable concept of "consulting".
Mr. Neville: I reject that.
Senator Jessiman: You don't agree with that statement?
Mr. Neville: I don't agree with it at all in terms of my own role and those to which I can speak with any knowledge.
Senator Jessiman: You knew a number of them?
Mr. Neville: On both sides. I have a lot of respect for the people who appeared before you yesterday who I can vouch for as professionals even though on this case they were on the other side of the issue.
Senator Jessiman: Fine. I am going to read one other sentence.
When senior bureaucrats involved in the negotiations for the Government of Canada feel that their actions and decisions are being heavily affected by lobbyists, as occurred here, the role of the latter -
Being the lobbyists.
- has, in my view, exceeded permissible norms.
Mr. Neville: The first half of that sentence is simply untrue in regard to my own activities or any other activities to which I have any knowledge. And the second conclusion I disagree with completely.
Senator Jessiman: Thank you, Mr. Chairman.
Senator Grafstein: Chairman, again following Senator Jessiman's statement, just one question.
Mr. Neville, was there anybody in Ottawa of a major - as a major consultant that wasn't involved in this file?
Mr. Neville: Yes. Hill and Knowlton, probably the largest single firm, to begin with. I don't recall them having any particular involvement.
Senator Grafstein: Is it fair to say that this was a large number - a large aggregate number of consultants and lobbyists involved in this file from all aspects, I am not just talking about from your perspective?
Mr. Neville: Yes, to be honest with you, until recently, I had never focused on the fact that some of these firms - they certainly would not have had a prominent role in it, let me put it that way. But, again, I ask you to go back and look at the registrations around other major procurements; and even in a numerical sense this was not excessive. There were principally two operating - two major firms on the Claridge side and some others in what I took to be a supplementary role. I think that is the evidence. And on our side there was myself for much of this period and some, as I say, fairly limited support services, and then latterly Mr. Doucet's involvement. That is not excessive in any comparable sense, if you want to go back and look at T3 to take a quite close to this area comparison, or any other major procurement that I can think of.
The Chairman: May I thank the witness, colleagues?
Mr. Neville, thank you very much. You have been a very good and forthcoming witness. You have given us a lot of very interesting material.
Mr. Pascoe, please.
Mr. Nelligan will introduce our next witness.
Mr. Nelligan: Senators, our next witness is Mr. Andrew D. Pascoe of A.D. Pascoe and Associates. You will recall that I have already read into the record a letter which he sent us earlier when his name arose in the course of these inquiries.
I understand that Mr. Pascoe on being sworn has an opening statement to make.
The Chairman: Mr. Pascoe, are you prepared to be sworn now?
(Andrew D. Pascoe, sworn:)
The Chairman: Will you proceed, Mr. Pascoe.
Mr. Andrew D. Pascoe, A.D. Pascoe and Associates: Thank you, Mr. Chairman, senators. I appreciate this opportunity to outline for the committee my role with respect to the terminal redevelopment project at Pearson airport.
I was employed from March of 1990 to October 1991 as a special assistant to the Honourable Doug Lewis. Mr. Lewis, as the committee knows, was the Minister of Transport from February 1990 until April of 1991. As his special assistant, aviation and airports, I acted as a liaison between the minister and Transport Canada officials on policy issues surrounding airport management and operations, air navigation, aviation regulation, and domestic and international air policy.
Among my responsibilities were a wide range of files pertaining to Pearson airport. Most of these can be described as day-to-day airport management issues, which often have some dimension requiring the involvement of the minister's office. These might include everything from air traffic control procedures at Pearson, the run-off of glycol deicing fluid, runway capacity limitations, the requirement for new equipment in the parking garages, garbage disposal, wildlife control, ground transportation, repair work in Terminal 1 and community relations surrounding noise management, to name just a few.
As Mr. Lewis testified before you, the spring and summer of 1990 was a period of intensive effort on the part of the government to address development issues at Pearson. The minister and his officials explored a range of options for financing terminal and runway development at Pearson, and I was involved in many of those discussions. During this time, a number of private sector groups lobbied the minister and his officials to consider their solutions to the redevelopment requirements at Pearson airport's terminal complex.
In October 1990, Mr. Lewis announced his intention to issue a request for proposals and to conduct a competitive bidding process. At that point, the focus of his efforts and that of his officials turned to identifying and resolving a myriad of policy issues relevant to the RFP.
In April 1991, Mr. Lewis was appointed Solicitor General of Canada, and I remained on his political staff until October of that year.
After leaving government service, I returned to Toronto to establish a consulting practice.
Paxport approached me in early 1992 to propose a consulting contract to assist them in outlining their plans for the redevelopment of Terminals 1 and 2 to the province of Ontario, regional and municipal governments in the greater Toronto area, business groups, organized labour and other local organizations. This I did through the balance of 1992 by organizing a series of meetings, presentations, correspondence and other contacts.
Typically, Paxport's messages in these meetings was that the terminal development was essential to Pearson's future as a hub airport, and that the redevelopment of Terminals 1 and 2 by the private sector was consistent with the eventual transfer of Pearson airport to a local airport authority.
The question was raised in this committee about a possible conflict of interest in my situation. Let me try to address that issue if I can.
When Paxport became one of my clients, I reviewed my obligations as a former government employee to ensure that I complied with the Conflict of Interest and Post-Employment Code for Public Office Holders. My retainer relationship with Paxport involved communications and public affairs activities focused on provincial, regional and municipal levels of government and on non-governmental organizations.
The principle behind the Post-Employment Code is that public office holders have a one year cooling off period before they can deal with the federal government on an issue in which they had some involvement while in public office. Since my mandate did not involve representing Paxport to the federal government, I concluded that this principle was not relevant in my situation.
Section 59 of the code says that you can't switch sides on a specific transaction. The request for proposals for the redevelopment of Terminals 1 and 2 was not issued until March 1992, five months after I left government service. From Paxport's standpoint, the specific transaction involved by the time I began my work for them was their response to the request for proposals. Again, I looked carefully at the guidelines and concluded that I was in compliance.
It was not within my mandate to lobby federal government politicians or officials on the subject of Pearson terminal redevelopment, and I had no such contact over the course of my involvement as a consultant to Paxport. I did not advise Paxport on how to deal with the federal government, nor did Paxport ask me for such advice. I was not asked to contribute to the Paxport proposal in response to the RFP, nor did I make any such contribution.
I was retained by Paxport because I was knowledgeable about airports, and in particular about Pearson, because I was experienced in dealing with local governments and other organizations on Pearson issues, and because Paxport believed that I could be of assistance to them in a communications role.
I did list Paxport as one of my clients when I registered as a lobbyist under the federal Lobbyist Registration Act in January 1993. By then Paxport had won the competition and I anticipated that the scope of my responsibilities would broaden to include the federal government. However, by that time, Paxport and Claridge had focused their energies on consummating a merger and on negotiating the terms of their ground lease with the federal government. I had no role whatsoever in discussions between Pearson Development Corporation and Transport Canada.
In spite of the outcome I am proud of the contribution that I was able to make for the development of this important facility. In light of the very significant role that the airport plays in the economy not only of Southern Ontario but all of Canada, I sincerely hope that a way can be found to ensure that Pearson achieves its full potential.
I hope that this information will be helpful to the committee in putting into the proper context my involvement with Paxport.
Mr. Chairman, thank you. I would be pleased to answer your questions.
The Chairman: Thank you very much, Mr. Pascoe. Can you solemnly testify that you have never, ever seen me before in your life and you had no association with me in any matters involving the transition of the governments of Canada?
Mr. Pascoe: I am sorry, once again, please?
The Chairman: Senator Kirby.
Senator Kirby: Thank you, Mr. Chairman. Mr. Chairman, I am actually going to be quite brief with this witness, just a couple of things I want to try to clarify.
The first document I want to use is numbered 001114 which is, looking at my assistant, that is the one we have given a letter A to. But I think in his opening statement, which I didn't have when I prepared this line of questioning, I think Mr. Pascoe may have answered this question.
I just wanted to establish, and I think you did this, Mr. Pascoe, in your opening comments, that while you were in Mr. Lewis' office, in fact as these memos attest, you attended a number of meetings in connection with the development of Pearson prior to the RFP being issued, that when it lists participants "MO", I assume, it says your name and "MO", I assume that is minister's office?
Mr. Pascoe: That is correct.
Senator Kirby: What I did not realize in fact was that you were the minister' special assistant on aviation and airports and then you would have naturally enough been involved in all the discussions on Pearson that took place while you were in the minister's - while Mr. Lewis was Minister of Transport?
Mr. Pascoe: Pearson Airport was a file of great importance to Mr. Lewis. I don't think that a weekly departmental briefing went by without Pearson being on the agenda. Certainly, development of the terminals and the runways was a high priority and, among other aviation issues, such as the launching of the Open Skies negotiations, the completion of negotiations with the airport authorities in Montreal, Vancouver, Calgary, Edmonton, those would have been the high profile files that Mr. Lewis kept a very close - kept very close tabs on.
Senator Kirby: So it is not unfair to say that while you were in Mr. Lewis' office you were very much up to date on government thinking and, indeed, both at the bureaucratic and the political levels, government thinking with respect to all issues related to Pearson?
Mr. Pascoe: That is correct.
Senator Kirby: Okay. The next document I want to use is your letter to the Clerk in response to, I guess, Mr. Nelligan's request. This is a letter you sent us dated August 10th. I know that Mr. Nelligan said it has been read into the record. But I am going to give you a copy of it in case you don't have it with you because I want to ask you a couple of questions about it. Okay?
Mr. Pascoe: Yes.
Senator Kirby: In, I guess, the third paragraph of that letter and in your opening statement, you say that Paxport became one of your clients in April 1992; right?
Mr. Pascoe: That is correct.
Senator Kirby: Then I want to give you another document, which is document number - I am sorry, it is whited out here, I can't quite read it - it is not whited out, it is just the Xerox did not come through. This is my document letter D. It has 733 on the top. This is a memorandum which was referred to earlier when Mr. Neville was here from Ray Hession to Bill Neville dated February 21, 1992, and you will notice that in that memorandum - so this is from Paxport; it is from Ray Hession to Bill Neville. You will notice the second paragraph of that memorandum says that - there is an organization chart obviously attached which shows you, John Legate and Hugh Riopelle in the government relations box.
I am really puzzled because your letter to us and your opening statement said that Paxport became one of your clients in April of 1992 and this is a February 1992 memorandum. Why the inconsistency?
Mr. Pascoe: I don't think there is an inconsistency there, senator.
Senator Kirby: You were shown on an organization chart even though you never had a contract with them?
Mr. Pascoe: I was first approached by Mr. Hession roughly around - roughly sometime in February 1992, I don't recall the exact date, and asked whether or not there would be an opportunity for the two of us to do some business together. I explained my situation as far as my post-employment requirements were concerned. He said that was fine, that what he had in mind for me was the specific role he has outlined here dealing with provincial and municipal governments and non-government organizations, economic development groups and so on at the local level.
Senator Kirby: So even though you hadn't signed a contract you still appeared on the organization chart, like even though you didn't get a contract until two months later Paxport was still showing you on as one of their people.
Mr. Pascoe: I think that what Mr. Hession was doing at that point in time was planning all aspects of the Paxport effort going forward once the RFP was issued. The request for proposals didn't come out until, I believe, the second week of March, and I submitted a letter to the clerk, my formal letter of engagement. I don't know if you have a copy of it, senator, March 16, I again refer to April 1st.
Senator Kirby: I think you have just answered my question. I think what you just said quote - and I would like to quote exactly what you said - "My formal letter of engagement was dated some time in April." That, needless to say I think intuitively, raises in my mind that there may well have been an informal arrangement as opposed to a formal one that may well have begun before April.
Mr. Pascoe: There was no effort on my part on behalf of Paxport prior to April 1st, sir.
Senator Kirby: On behalf of what?
Mr. Pascoe: On behalf of Paxport there was no effort on my part prior to April 1st.
Senator Kirby: In spite of the fact that you are shown on the chart.
Again on that document, just since you have it in front of you, and you just commented on it a minute ago, you will notice it says that you will deal strictly with the province of Ontario and Metro Toronto municipalities. Indeed, you echo that thought in your letter to the committee of August 10th because you say in, I guess it is the fourth paragraph of the letter:
It was not within my mandate from Paxport to lobby federal government politicians or officials...And in fact, I had no such contact over the course of my involvement as a consultant to Paxport...
In that case I would ask you to look at another document, which is number 000361, which is my letter E, which is a report on a meeting held at Paxport's request with government officials, specifically Mr. Power of Transport Canada, in which you are seen as being in attendance. And I guess I - I guess it depends on what you call contact. Maybe you never shook hands with the guy. But I find it hard to believe that you attended a meeting in January 1993 and that that - that that is consistent, I find it - I find that inconsistent with your statement that "...I had no such contact over the course of my involvement as a consultant to Paxport..." Can you explain the inconsistency?
Mr. Pascoe: It says January 1993.
Senator Kirby: I am reading from your letter to us, that is all.
Mr. Pascoe: Sorry, this is the first time I have seen this document. My immediate recollection of this particular meeting was that this was January 19th, 1993. This was immediately in the post- - in the period immediately following the point where Paxport was awarded the best overall proposal, and there was a process under way to assemble the negotiating team going forward with the negotiations with Transport Canada. My recollection was that Mr. Hession invited me to attend the meeting with him just to discuss those issues that I had been involved in.
I am sorry, I don't have any more recollection than that at this point.
Senator LeBreton: As a point of clarification on this particular point because the dates are - it says communications, but in your statement, Mr. Pascoe, you said, "I did list Paxport as one of my clients when I registered as a lobbyist under the federal lobbyist registration in January 1993."
Senator Kirby: All I am saying is his previous sentence says exactly - it is not my words, they are his words - he had no such contact with federal government politicians or officials, and then there is a memo that says he was at a meeting with officials. Those two statements cannot possibly be consistent. I am not arguing with the date. I am only arguing about there are two clear statements. One he said a statement of fact that he never saw a government officials; and, two, there is a record of a meeting that he was in attendance where government officials were present. I am not arguing the date issue. I am arguing whether or not his statement in his letter to us of August 10, which in fact he repeated under oath in his opening statement, is correct. That is all I am asking.
Mr. Pascoe: If I may, I can just point to the first point on the memo, Mr. Power's memo January 26, 1993:
The primary purpose of the meeting was to provide Mr. Hession an opportunity to be updated on the status of discussions with Transport Canada as he had only recently returned from vacation.
My recollection was that Mr. Hession and I met that morning. I met him through the course of my involvement with Paxport every couple of weeks just to update him on issues that I was involved in. It may well have been that Mr. Hession said, "I am going off to meet Wayne Power to get updated on Pearson issues. Why don't you come along with me?" I think it was really just a matter of coincidence.
The only contribution I think I would have been able to make in a meeting like that was to discuss those issues that I was involved in on behalf of Paxport, which were issues relating to the municipalities, which is an issue of significant concern to Transport Canada management at Pearson airport.
But as to nailing me down specifically on the fact that I had no contact with officials, I guess on Paxport business I didn't have specific contact with officials. I had worked at Transport Canada for over a year. There were a lot of officials who had become friends, people who I kept in touch with from time to time. I guess I should clarify that -
Senator Kirby: We understand the social aspect.
Mr. Pascoe: - on specific Paxport issues this is not part of my mandate.
Senator Kirby: Okay. My last question - couple of questions actually deal with your interpretation of the Post-Employment Code, commonly known as the conflict of interest guidelines.
In your letter and again in your opening statement you make the observation that because the RFP was not issued until March 1992 correctly, as you say, it was also correctly five years after you left government service and therefore since the conflict of interest guidelines restrict what you can do with respect to, and I am quoting now from the act, "specific ongoing proceedings or transactions," your view was that even though you had this substantial amount of information because you said a few minutes ago you were in the period of time you were in the minister's office you were very much up to date on government thinking with respect to Pearson on the early stages of development of the RFP conditions, et cetera, that even though you had that you said precisely because the RFP had not been issued, therefore, there was no specific ongoing proceeding or transaction and therefore you were okay within the conflict of interest guidelines. Is that a fair statement as to what you said?
Mr. Pascoe: That is fair.
Senator Kirby: I guess my question is - I am not a lawyer, but I think I understand the spirit of the law as opposed to the legal side of it, and you may in fact be in a very, very narrow, very carefully defined sense legally correct. It does seem to me that if you have been to meetings while you were in the minister's office or were in the process that were clearly involved with the process that ultimately led up to the issuance of the RFP, that clearly that is the kind of switching sides conditions that the conflict of interest guidelines are designed to prevent because I mean in that theory what you could have done is you could have stayed employed in the minister's office until 24 hours before the RFP was issued, you could have switched the next day, and under your definition that would have been absolutely acceptable behaviour, where I think any reasonable person would say that such behaviour would have been blatantly in violation of the spirit of the guideline.
I notice in connection with that that you were one of the people that Paxport listed when they wanted a large number of people to have access to the data room. You were one of the people who were given access to the data room on March 24, 1992. That is the day that - that document, by the way, Mr. Chairman, we don't need to circulate, but the document is 0001382. It simply verifies that Mr. Pascoe was one of the people on Paxport's behalf who was to have access to the data room.
I think access to the data room would have been an enormous benefit to one of the bidders simply because you understood an awful lot of the documents that would have been in the room because you would have known those documents from your time in government.
I guess my question to you is: Do you really - well, you may well have stayed within the narrow legality of the conflict of interest guidelines, do you really think what you did was consistent with the spirit of the guideline?
Mr. Pascoe: Absolutely.
Senator Kirby: You would buy my theory that in fact, you could have left the minister's office the day before the RFP was issued and still have been consistent?
Mr. Pascoe: No. We have to consider what issues we were dealing with in the minister's office at the time that I was there up until April of 1991. All that had happened was that the minister had announced in October of 1990 his intention to issue a request for proposal and to run a competitive bid process.
As I said in my statement, the focus of our efforts following that announcement was to identify all of the issues that were relevant to the development of the RFP. I think others have testified before you that there were a whole range of issues, everything from how much foreign ownership shall we allow in the consortium; in view of the interest of Airport Development Corporation and Mr. Huang and Mr. Danczkay in Terminal 1 and 2, what are the monopoly and competition considerations; what kind of obligations do we have to the employees of Transport Canada at the airport; what kind of obligations do we have to all of the leaseholders; and what is the role of the airlines in the consortium? And this meeting that you referred to in your first question, there was a series of meetings that were held with the developers the week of the 15th of April of 1991. Those kinds of questions were being put to the developers on behalf of the government with the officials who were putting together the RFP. Those issues were not resolved. In fact, the cabinet shuffle was a week later and off we went to Solicitor General. Those issues were not resolved by the time I left the minister's office.
In the meantime, I was off in a Justice policy portfolio dealing with criminal justice issues for six months. I left the government. I returned to Toronto. I set up my business and started to try to develop business leads and contacts.
In the meantime, those issues that we had been dealing with and had been left unresolved when we left Transport were addressed by officials, by the minister, I presume by cabinet, perhaps it went back to Treasury Board, I don't know; and the RFP was issued in March of 1992.
Anything that I had any involvement in in April of 1991 was irrelevant to Paxport by the time I started working with them in April of 1992.
I can't think of a single thing that - a single bit of knowledge that I would have had at that point in time that would have been relevant to Paxport in their response to the RFP.
That being said, my responsibilities for Paxport had nothing to do with the response to the RFP or the development of their proposal. I wasn't asked to participate or to contribute and I made no such contribution.
Senator Kirby: As I listen to you reel off - I am impressed with your knowledge of the Pearson airport issues as you reeled off the litany of issues that clearly ultimately had to be resolved in the - in anyone's response to the RFP. You are obviously extremely knowledgeable about them and, clearly, you would have been of enormous help given that background of knowledge you had acquired inside the government, you would have been of enormous help in developing an RFP, particularly since you had access to the data room and thereby inevitably would have seen during your time in Transport some of the documents, not all of them obviously, but some of the key documents that must have been in the data room, knowing what was in the data room, and we have had evidence on that already.
Mr. Pascoe: You flatter me, senator, with your assessment of my knowledge about airport issues generally. The nature of - as you know, the political assistant's job is you really get a small taste of some of the issues as they flash by you, and I gave you a list of some of the issues I would deal with in a typical day. I would by no means represent myself as being, you know, intimately knowledgeable with airport operations. Certainly it was something I learned a great deal about while I was at Transport. But as far as all the documentation in the data room is concerned, I saw the list of people that Paxport had identified as being eligible to enter the data room. My name was included on that list because I think they wanted to include everybody just to make sure if the occasion arose. But I think that if you look at the records of who actually entered the data room you won't find my name because, once again, the scope of my responsibilities had nothing to do with what was in the data room or the preparation of the Paxport proposal.
Senator Kirby: I don't have any more questions, Mr. Chairman.
Senator Grafstein: Am I allowed to follow?
The Chairman: I have one myself. I gather that the thrust of Senator Kirby's questions have really nothing to do with the questions asked of previous lobbyists. He is getting you to defend your position, as defending your compliance with the conflict of guideline regulations. Apparently you made an arrangement with Mr. Hession in which you satisfied yourself and Mr. Hession that you were not going to lobby any federal officials, that you were going to be restricted to the province of Ontario and the municipalities in that province, Metro Toronto particularly, as it affected the airport.
Mr. Pascoe: The greater Toronto area, yes.
The Chairman: While you attended a meeting with Mr. Power you did so, with brackets it says "communications", and if you went to the data room or any place else, the simple question is: Did you lobby any federal officials?
Mr. Pascoe: No.
The Chairman: During your term or the term that you were under contract, you didn't talk about this matter to any politician or any public servant?
Mr. Pascoe: If an opportunity came up to say hello to somebody who I had spent four years working with, "How is it going? I hear you are working on the Paxport file. How are things?" "Fine." If you classify that as some form of contact, then yes; but as far as responsibility for lobbying for the express purpose of landing this particular contract, the answer is no.
The Chairman: Persuasive arguments in advocating that what you were paid to do. You were restricted to and you stuck to the Toronto area?
Mr. Pascoe: That is correct, sir.
The Chairman: All right.
Senator Kirby: In spite of that, Mr. Chairman, since you are leading the witness, I don't mind, I just ought to point out, though, that, clearly, Mr. Pascoe did have at least one meeting we know of, and maybe he had others, but the only one we have evidence of is the memorandum of the meeting that I tabled. So he clearly (a) did attend meetings with federal officials contrary to what he told us in his letter and what he said in his opening statement; and (b) they were meetings - at least one meeting at which he was there on behalf of Paxport discussing, as the memorandum is clear, Paxport-type issues. That is all I am saying.
Senator Grafstein: Mr. Chairman, just a brief question, if I might, a followup on both the line of questioning of you and Senator Kirby.
Mr. Pascoe, have you had any contact following leaving the government with John Moore of Coopers and Lybrand?
Mr. Pascoe: No.
Senator Grafstein: No contact with him whatsoever.
You were present, I guess, in the minister's office, and I am referring to a memorandum prepared by Mr. Hession on April 16th, 1991 from Mr. Hession to Mr. Matthews. It is April - I don't have the document date.
Senator LeBreton: What is the number on it?
Senator Grafstein: I don't have it here. The date of the memorandum was - memo was April 16th from Mr. Hession to Don Matthews, Mr. Jack Matthews, Lawrence Sinclair and Mr. Trevor Carnahoff. I think it was earlier referred to by Senator Kirby. Do you have that memorandum? Yes.
In that memorandum it states:
Andy Pascoe represented the Minister's office along with John Moore of Coopers, Lybrand who has been retained by the Minister to ensure the probity of the proposal call process.
Were you involved in working out the terms of the retainer with Mr. Moore when you were in the minister's office?
Mr. Pascoe: No. Coopers and Lybrand was retained by, I assume through a contract with Transport Canada, to ensure - the term here says probity, but the fairness of the proposal call process as referred to in Mr. Matthews memo and since -
Senator Grafstein: Mr. Hession's -
Mr. Pascoe: Mr. Hession's memo to Mr. Matthews.
This particular meeting, and there were a series of three meetings, one with Paxport, one with Canadian Airports Limited, the British Airports Authority led consortium and one with Airport Development Corporation, Huang and Danczkay, was just as it says here:
The purpose of the meeting was to review progress to date on the Terminal 1 and 2 redevelopment project and to solicit our views on some key aspects of the project.
Mr. Lewis, following his announcement on October 1990 that he was going to be running a fair and open competition and that the next several months would be spent addressing key policy issues relevant to the RFP, made it very clear to the consortia at the time that they would be approached at the appropriate juncture and asked for their input into the - their feedback, I guess, their input into the development of the RFP. And this particular meeting that Mr. Hession refers to in his April 16th memo which reflects, I would assume, without having seen it, the contents of the memo to file from Mr. Power of the same date was really a sort of reflection of Mr. Lewis' commitment to consult with the developers at key points through the process. We asked them a series of questions on issues that I referred to previously.
I was really only there in the capacity of representing the minister just to say, "This is exactly what we said we would do and we are doing it." Mr. Moore, I guess, was at that particular meeting because Coopers and Lybrand had been retained to ensure that it was a fair and even process throughout the piece. But the meeting was really led by Mr. Power and I believe Mr. Berigan.
Senator Grafstein: From the time of that meeting to the time you left government did you have any further contact with Mr. Moore?
Mr. Pascoe: With Mr. Moore, no.
Senator Grafstein: Thank you, Mr. Chairman.
The Chairman: Senator LeBreton.
Senator LeBreton: Thank you, Mr. Chairman, and welcome, Mr. Pascoe.
I am just going to - I have got -
The Chairman: Senator LeBreton, I have to interrupt for a minute.
Is it agreeable, senators, that we will break at 11:30 - we will follow our regular time period.
Senator Kirby: Yes, Mr. Chairman, we will, but consistent with what we did yesterday, I don't believe our side has any more questions for Mr. Pascoe, so if going to 20 to 12 helps the witness and allows us to start fresh with a new witness at the break, that is fine. I am trying to make it easier.
The Chairman: Senator LeBreton is the last one.
Senator LeBreton: Thanks, Mr. Chairman. I don't imagine I will be going to 20 to 12.
I have a few questions, and they are very direct questions, and I think as a result of your statements, and I just want to put these on the record officially. In your role as working for Paxport Management Inc., did you meet developers or lobbyists on your own without officials being present?
Mr. Pascoe: In my role in the minister's office?
Senator LeBreton: No. I said with Paxport Management Inc. Did you meet with developers or lobbyists on your own without officials being present, while you were working with Paxport Management Inc.?
Mr. Pascoe: I am sorry, I am not following the question.
Senator LeBreton: I was just trying to establish - you talked about working - you talked about working in Metro Toronto with the municipalities. I am just trying to establish for the record that you did not meet with the developers.
Mr. Pascoe: The developer was my client at that point in time. Do you mean while I was in the minister's office or - what I said in my statement was that - in one of my comments that this was relevant to my work in the minister's office. The only meeting I would have had with ministers and with developers or lobbyists in the course of my role in the minister's office would have been that meeting in April of 1991.
Senator LeBreton: Okay. I am sorry, Mr. Pascoe, I was - I am losing my voice and I wasn't meaning to intend - obviously, you were working with your own company in Toronto.
I have some specific questions with regard, then, to your role as an employee of Minister Lewis. Did you ever deal directly with the deputy minister on matters with regard to, you know, the responsibilities you had in the minister's office in your role as a special assistant to the minister?
Mr. Pascoe: Directly with the deputy minister, no. That relationship was between the chief of staff and the deputy minister. That is traditional.
Senator LeBreton: Did you have any contact with the Privy Council Office?
Mr. Pascoe: On Pearson issues?
Senator LeBreton: Yes, on this subject.
Mr. Pascoe: No.
Senator LeBreton: Did you have any contact with the Prime Minister's Office?
Mr. Pascoe: On Pearson again?
Senator LeBreton: Yes.
Mr. Pascoe: No.
Senator LeBreton: Did you ever attend a cabinet meeting or a meeting of the P&P?
Mr. Pascoe: No.
Senator LeBreton: Okay. I want to refer specifically to some minutes that we got yesterday with regard to some responsibilities you had with Paxport Management Inc. I really wish we would have had this document when Mr. Bandeen appeared, but I would like - I am going to read it into the record.
"Jack Matthews" - this is a meeting - this is a document 001316. It is a Paxport meeting with GTRAA.
Senator Grafstein: Can you tell us the date of that?
Senator LeBreton: It was in our documents yesterday. It actually has no date. It doesn't have a date on the actual document, but it reports on a meeting that took place on Tuesday, July 6, and then it is written in hand, "1993".
Senator Grafstein: July 6 of what year?
Senator LeBreton: Nineteen ninety-three. It was in our documents yesterday that came in with the -
The memorandum says:
On Tuesday, July 6th, 1993, Jack Matthews and Andy Pascoe from Paxport met with GTRAA Chairman Robert Bandeen and Steve Shaw, at their request, to discuss their current situation.
As I pointed out earlier, I would have loved to have had this memorandum, and it goes back to our documents problem, chair. I would have loved to have had this memorandum with regard to when we had Mr. Bandeen here.
I am going to quote from the memorandum and I am going to read it:
Jack Matthews opened by saying that Paxport has not opposed the creation of an LAA at Toronto and is prepared to work with a future Authority, but that the decision to accredit an LAA is the federal government's. In any case, Paxport's highest priority at present is to complete lease negotiations. Bandeen expressed his frustration at the unwillingness of Minister Corbeil to grant accreditation to the GTRAA, which he attributes to the government's preference to complete its "patronage" deal -
Where have we seen that term before?
- with Paxport. He characterized the federal government as "obstructionist" and indicated that if he did not receive a satisfactory answer from Minister Corbeil at a meeting of Thursday, the LAA would "go public".
Bandeen expressed his view that the federal government "needs Ontario" to win the next election, but that they "won't get it" when the public finds out how badly the LAA, which "represents 5 million people" has been treated. Bandeen indicated that the GTRAA is under considerable pressure from the municipalities, who have not seen evidence of progress, while Montreal and Vancouver already have LAAs. While Mississauga and the City of Toronto are currently at odds over which airports should be included in an LAA, he claimed that there is unanimity among local municipalities.
Which is an odd statement when he already said that Mississauga and Toronto are currently at odds.
And then jumping over to the next paragraph:
- Bandeen suggested that the GTRAA would "scream" publicly if they felt their interests were being ignored.
He obviously - that is the end of what I am going to quote out of the memo. You remember this meeting, Mr. Pascoe?
Mr. Pascoe: Yes.
Senator LeBreton: Who was at that meeting?
Mr. Pascoe: As it said in the first line of the memo, and it was July 6, 1993, Jack Matthews and I representing Paxport, and Mr. Bandeen and Mr. Shaw representing the Greater Toronto Region Airports Authority.
Senator LeBreton: And you know this is - these are pretty strong words. So in your view Mr. Bandeen was -
Mr. Pascoe: As I recall from the meeting, Mr. Bandeen was very angry, very frustrated. He professed not to understand why the federal government had not accredited the local airport authority; and he was extremely frustrated at the fact that the airport authority had not been granted standing at the negotiations between Transport Canada and Paxport in the Paxport/Claridge, I guess it was at that point, over the T1T2 project.
This was - this kind of meeting, I guess it was atypical, but it was sort of indicative of the kind of work that I was trying to do on Paxport's behalf at the local level. We arranged the meeting to see if there was a way for Paxport to address some of the GTRAA's concerns and to encourage dialogue between the two organizations.
All the way through the piece, certainly the work that I did in 1992 on Paxport's behalf in the greater Toronto area, one of the issues that did arise on a fairly regular basis was: Is this project consistent with the eventual transfer of all of Pearson to a local airport authority? And certainly - I can't speak for the federal government at the time, but certainly there was nothing that Paxport said at that particular point in time that would have suggested that all of the airport and Terminals 1 and 2, Terminal 3, the runways, all of the commercial land that was available, other concessions and leases and so on, would not be transferrable to an airport authority. That was not part of our - part of our perspective. That is to say that the T1T2 lease, like all the other leases on the airport, would be assigned to the airport authority in due course if the government chose to go that way, just as all other private leases in other airports that had been transferred to local airport authorities had been done.
But Mr. Bandeen's fight, if you will, was not with Paxport per se, and in fact over the course of this meeting Mr. Matthews was very forthcoming in terms of what he offered to share by way of information about the negotiations with Mr. Bandeen. It became evident over the course of the meeting, as I recall, that Mr. Bandeen really was not interested in information from Paxport; he was interested in his relationship with the federal government.
But I think that this is - this was instructive from the standpoint of the effort that Paxport tried to undertake to develop a relationship with these groups at the local level.
Mr. Bandeen, I guess recently, had become chairman of the Greater Toronto Region Airports Authority - I think they were only incorporated in March or so of 1993. Through the course of my major degree of involvement in 1992 there was no GTRAA. In fact, there were two separate groups that were working at cross purposes. There was one group that was called the South Central Ontario Airports Authority, which was kind of operating under the aegis of the province of Ontario, and I think that Mr. Church was here trying to describe to you what their activities were at that point in time.
In response to that there was a second group that emerged called PRAC, I believe, Pearson Region Airport Council - forgive me if I am getting the titles wrong. And these two groups were kind of going at cross purposes.
In the meantime, the federal government was waiting for one group to come forward and say "We are the airport authority and we have unanimous support from all of the municipalities."
A key issue, and I'm not sure how it's finally been resolved, is the fact that the city of Mississauga and the city of Toronto were at odds over the future of this airport authority.
You made reference to Mr. Bandeen's comments about Mississauga and Toronto currently at odds but that there was unanimity among the municipalities. You know, I can't comment on that with any degree of accuracy or knowledge at the time, but certainly given my experience with the airport transfer policy during the time I was in Mr. Lewis's office and we were dealing with the first four airport authorities, it's a fundamental issue if the host municipality, Mississauga in this case, is not on board with the airport authority.
I don't want to defend Mr. Corbeil; he is certainly capable of doing that himself, but if Mr. Bandeen was frustrated, I can certainly understand the perspective of the government at the time.
Senator LeBreton: Just to quote out of page 31 of the RFP, there is a specific reference there:
- the Government will have the right to assign the ground lease to another party including a Local Airport Authority.
Going back to the work that you were doing for Paxport, had you any indication in your other meetings with Mr. Bandeen or other people - Mr. Meinzer perhaps, or others - that they would mount, as Mr. Bandeen threatened obviously here, to go public? What was the relationship with this group heretofore, before this memo was written, as you were working on -
Mr. Pascoe: As I say, this particular iteration of the group has only emerged in the spring of 1993, and they've made, of course, significant progress since that time and they've been recognized, if you will, by the current government and they're getting ready for their lease negotiations.
Through the course of 1992, I don't recall having a specific meeting with either of the two competing airport authority groups. The officials that I would deal with were in the regional and local governments that were sponsors, if you will, ultimately, of the local airport authority.
Senator LeBreton: And obviously would have been aware of Mississauga and Mayor Hazel McCallion's considerable concerns at the time with regard to the whole Pearson issue?
Mr. Pascoe: Mayor McCallion's concerns, as I recall, were primarily focused on runway issues. She had some very specific requirements for the new north-south runway that's currently under construction, in terms of operations and so forth, that she obviously took very seriously and was able to negotiate an arrangement with Transport Canada over. I don't recall Mayor McCallion having any specific concerns about the terminal redevelopment project.
The Chairman: Toronto Island Airport.
Mr. Pascoe: Her concern, I believe, with respect to the airport authority and the resolution that was coming out from the city of Toronto was to ensure that the City Centre Airport as it's now called, the Toronto Island Airport for those of us who've been using it for a few years, was to ensure that that particular facility was part of the overall Greater Toronto Regional Airports Authority. Her view, I believe, was that it was necessary for the City Centre Airport to be part of the whole system in order to act as something of a reliever to Pearson airport.
So her disagreement with the city of Toronto, which is part owner of the Island airport, was to ensure that that facility was included in the overall framework for the airport authority for Toronto.
Senator LeBreton: One final question. Did you have any further meetings with Mr. Bandeen following up on this meeting of Tuesday, July 6, 1993?
Mr. Pascoe: No, not to my recollection.
Senator LeBreton: Mr. Bandeen, just for the record, did exactly what he said he would do.
Thanks, Mr. Chairman.
The Chairman: Shall I thank the witness?
Mr. Pascoe, thank you much for appearing before us today. Thank you.
We adjourn now until 12:30. We have an hour for lunch, and our first and last witness this afternoon will be Mr. Doucet.
The committee adjourned until 12:30 p.m.
Ottawa, Thursday, August 24, 1995
The Special Senate Committee on the Pearson Airport Agreements met this day, at 12:30 p.m., to examine and report upon all matters concerning the policies and negotiations leading up to, and including, the agreements respecting the redevelopment and operation of Terminals 1 and 2 at Lester B. Pearson International Airport and the circumstances relating to the cancellation thereof.
Senator Finlay MacDonald (Chairman) in the Chair.
The Chairman: Come to order, please.
Mr. Nelligan will introduce our witness this afternoon.
Mr. Nelligan: Our only witness, senators, is Mr. Fred Doucet, who is the principal officer of FDCI, formerly known as GECG, and the acronyms he can explain to you, but he is also in the government consulting business and I believe he has an opening statement.
The Chairman: Mr. Doucet, you're prepared to be sworn?
Mr. Doucet: Sure.
(Fred Doucet, sworn:)
The Chairman: I believe you've given us, and would you proceed with, your opening comments?
Mr. Fred Doucet, Fred Doucet Consulting International: Thank you. Just to clarify counsel's opening remarks, if I may, on the acronym, FDCI stands for Fred Doucet Consulting Incorporated. GBCG stands for Government Business Consulting Group. And in the process of my statement, I'll outline the relationships between and among them.
Mr. Chairman and senators, I have provided you a copy of my opening statement. In it, I outline briefly my background, both educational and my work history. Would it be appropriate for me to go through that?
The Chairman: Yes, I think you should.
Mr. Doucet: I hold a Bachelor of Science degree, Bachelor of Education degree, a Masters degree and a Ph.D. degree.
My work history since 1960 includes having been a school teacher; a school principal; a dean of studies; a university administrator; a university teacher; a research supervisor; also a chief executive officer of East Coast Energy Limited; Chief of Staff to a Leader of the Opposition, Mr. Mulroney; Senior Advisor to the Prime Minister of Canada, Mr. Mulroney; and Ambassador and Chairman of the Summits Organizational Committee; the President of FDCI; the President and CEO of GBCG, which was formerly FDCI and a name change occurred in '93 - January, '93 - and presently the President of FDCI, once again, following the sale of GBCG in January of 1995.
Senator Jessiman: Is this another corporation?
Mr. Doucet: It is the same corporation as the first incarnation. It got resuscitated.
Senator Jessiman: Okay.
Mr. Doucet: During my comments today I will be disclosing contracts, invoices and other materials of a confidential nature. I wish to make it clear to this committee that I associate myself fully with the comments of Mr. Neville and other witnesses before with respect to such disclosures.
I disclose these documents only to clear the air on a situation which has been the subject, in my view, of much confusion and misinterpretation.
My involvement with the Pearson International project, such as it was, began with the British Airport Authority/Canadian Airports Limited.
In March of 1990, we were recruited by Mr. Edwin Cogan, a leading international developer, and subsequently retained by British Airport Authority/Canadian Airports Limited to be its government relations consultant. Our assignment was to provide advice and counsel with regard to its intention to position itself and to compete for airport redevelopment and/or management opportunities in Canada and the U.S. starting with the anticipated private sector opportunity at Pearson airport.
In December of 1991, some three months before the issuance of the RFP on Pearson, our client advised us that it had come to the conclusion that the government process was moving too slowly and that it had serious doubts that the RFP would ever be issued. I believe that statements to that effect were placed in the public domain at that time. While our client shut down its planning operation in Canada at that time, that is December '91, it nonetheless left open the unlikely prospect that it might become interested again if ever an RFP issued.
I'm embarrassed; I'm missing a page in my own report; page 3.
Our contract with this client was and remains bound by a confidentiality clause. Our registration with the lobby registry, which is in your Tab 4, was left in place until December 1992, that is, until a result on the RFP was announced. This was for the purpose of keeping the client apprised of developments in Canada during the period immediately following its departure up to the ultimate end of the RFP period, inclusive of the response and the best overall selection, that is, December of 1992.
As reported above, during the period of the RFP and the subsequent response, evaluation and selection phases of the best overall bid, we had no involvement on the Pearson project other than a monitoring one for BAA/CAL.
Now I want to turn to aspects that have no bearing on the Pearson Airport project that arise from requests made under Access to Information, and these are contained in your Tab 1.
Last year, 1994, I was made aware by the PCO that an Access to Information request had been made to obtain copies of invoices pursuant to a contract which our firm had entered into on May 4, 1992 with two construction subsidiaries of Matthews Contracting Incorporated Limited, Coolsaet of Canada Limited and Construction Angkor Incorporated for assistance in the promotion of the national highways system. I am uncertain as to how precisely these invoices found their way to the PCO, although it appears it may have been through the Nixon inquiry, even those these invoices had absolutely nothing to do with the Pearson project.
As in the previous case cited, I consider all contracts with my clients confidential and I have never disclosed unilaterally the terms of our client contracts.
With that in mind, I objected to the disclosure of these particular invoices. Access to Information eventually ruled that the amounts on the invoices would be withheld from public disclosure. I am, however, permitted by the client to release now the invoice information as a measure of good faith and to avoid wrong impressions being created. And, indeed, these are incorporated in your tabs.
I repeat, however, that this contract and the invoices thereto had nothing to do with the Pearson redevelopment contract and its subsequent cancellation and therefore have absolutely no bearing on or connection to this committee's work. I have therefore submitted to this committee copies of the contract and invoices issued pursuant thereto.
In summary, the above relationship regarding the highways project consisted of a contract for $10,000 a month with two Matthews contracting incorporated companies, Coolsaet and Angkor, which took effect in May '92. This contract focused initially on the national highways system and subsequently also on a proposed involvement in a private sector consortium dealing with Highway 407 project in Ontario. Senior resources of our firm were duly registered with the lobby registry, as indicated in Tab 4, to carry out this work since this proposed national highways system program was a huge undertaking.
Invoicing under this contract carried on until May, '94. Also in September of '93, our firm was informed that all invoices under this contract from June 1, '93 would be reinvoiced to Paxport Incorporated and thereafter were invoiced to Paxport Incorporated. Payment on these invoices has not occurred since November of '93.
I want to refer now to further confusion emanating from documents that have surfaced after the Pearson contracts cancellation, included in your Tab 2.
Among the documents provided to me by counsel to this committee is a document entitled "Lobbyist list for Terminal 1/2 Project", and I believe it's your document reference 00637. This document wrongly identifies two other contracts of our firm which do not relate to "the privatization deal for Terminals 1 and 2". Our firm's contract with Airenco Inc. (AGRA) focused on a possible private sector consortium proposal on runway developments at several Canadian airports. Our firm's contract with the corporation of the city of Mississauga related to a possible purchase by the city of federal property. Each of the above contracts, I repeat, had nothing to do with the Pearson project and were duly registered with the lobby registry as to their respective focus, and this is shown in your Tab 4.
Finally, Mr. Chairman, senators, I want to turn to item 4 on my presentation entitled "Paxport Incorporated and Paxport International", your Tab 3.
On December the 3rd, 1992, the Government of Canada announced its selection of the best overall bid on the Pearson RFP. As I indicated earlier in this presentation, our firm was then registered with BAA/CAL and continued to be until December 17, 1992, as shown in your Tab 4. I was approached by Paxport later in December of '92 regarding several assignments. Our firm was already retained, as earlier noted, by Matthews - that is to say the Coolsaet and Angkor subsidiaries - on the NHS projects. Jack Matthews, the CEO of Paxport, and I discussed then the future of the airport devolution program in Canada and the growing opportunities in the airport business internationally.
On February the 1st, 1993 we signed one contract with Paxport Incorporated and one contract with Paxport International. We considered the terms of these contracts, as we do all consulting contracts we sign with each of our clients, to be confidential. However, I understand that copies of these contracts somehow may have found their way into the public domain and the client has advised me that I am free to release copies for this committee. I have, therefore, included copies of these for the purposes of this committee.
Our Paxport Incorporated activity was duly registered with the lobby registry, and that is shown in your Tab 4. The Paxport International relationship was not registered with the lobby registry since the activity under this particular contract did not require registration.
I would like to make the following comments on each of these two contracts: Our contracts with each of Paxport Incorporated and Paxport International were signed on February the 1st, 1993, and the former registered with the lobby registry on December 23, 1992, as shown in your Tab 4. The signing of these contracts and the appropriate registration with the lobby registry all occurred after Paxport was selected as the best overall bidder for the Pearson airport project. These contracts became effective at such time as the airport would be turned over to the new management, as the services to be provided by our firm were primarily related to future work in other airports in Canada and internationally.
Taken together, one-half of the two contracts was for consulting services to be done outside Canada and one-half for consulting services to be done inside Canada. The Paxport Incorporated contract was intended primarily to advise on other Canadian airport opportunities as the airports devolution program progressed over the next decade. The international side, as illustrated by the word "international" in the name Paxport International, was to assist in developing international markets to promote and position Paxport's airport development technology outside Canada.
To perform the services of these two contracts, our firm was committed to use the services of an outside firm, Sagegate Incorporated, in which it had and continues to have no benefit or ownership, and to pay 50 per cent of its fees to this firm. Sagegate's principals had a key involvement in the redevelopment of the Pittsburgh International Airport and other international development projects. Additionally, although not ascertained as to amount, further payments would have been made under the Paxport International contract to our United States associates Powell, Goldstein, Frazer & Murphy - in which, again, our firm has no ownership or benefit - for the international aspects of the services, and likely also to other consulting firms in other countries.
The monthly amounts of these two contracts; $8,700 and $8,000 respectively, are well within industry norms for such services, particularly when there are two or more firms doing the work and therefore sharing in the proceeds.
The ten-year term for the domestic aspect was intended to ensure continuity as the devolution of airports in Canada progressed and Paxport Incorporated attempted to position itself to participate. The ten-year term on the international mandate was appropriate in view of the long period of time required to promote airport transfer to the private sector and, thereafter, to help the client to respond successfully to requests for proposals for private sector involvement as they occurred around the world.
I note in brackets that the Canadian experience on airport devolution, which is the subject of review by this committee, is a good example of the ten-year planning horizon.
On December 3, 1993, I was advised officially by the Government of Canada - I'm sorry, I slipped there.
On December 3, 1993, I was advised officially that the Government of Canada had cancelled the Pearson project and that no further invoices should be forwarded. Invoices submitted for November '93 and December '93 had not been paid by that date and have not been paid since. Accordingly, no fees have been collected or out-of-pocket expenses reimbursed on either the Paxport Incorporated or the Paxport International contracts.
Thank you, and I'll be pleased to respond to your questions.
The Chairman: All right, colleagues, I have four senators who are listed now for questioning. I have, first of all, Senator Tkachuk, Senator Hervieux-Payette, Senator Grafstein and Senator Stewart.
Senator Tkachuk: Thank you, Mr. Chairman.
Thank you for this, Mr. Doucet. I'm going to take you back to your interest in the airport development with the British Airport Authority, which you say was in March, 1990 when you were first recruited. Could you tell me what the goals of the British Airport Authority were outside of getting business? Were there public policy initiatives that they wished to promote in Canada to allow them to do business here?
Mr. Doucet: I want to remind you, as I believe I said in my statement, that I am bound by a confidentiality agreement, still to this day, with this client, so I can only supply general answers that would be otherwise available through the public place.
To the best of my knowledge, British Airport Authority, when they came to Canada and subsequently incorporated a company called Canadian Airports Limited, which was a consortium, had as their specific first interest the prospect of a redevelopment assignment at Pearson. It was by no means their sole object. They, too, had noticed that the Government of Canada had moved quite a distance since the days of freedom to move, which I believe date back to the mid-eighties, towards airport devolution using a variety of models. They themselves, British Airport Authority, were a rather unique group in that they had been born of the bureaucracy in the U.K. and were now a private sector group. So they had an interest in pursuing the prospect of devolution of airports not only in Canada but in North America and indeed they did and became involved in Pittsburgh, ultimately, and since then in others in North America. But they came to Canada primarily because of what seemed to be developing with respect to Pearson.
Senator Tkachuk: Did they open up an office here?
Mr. Doucet: They opened up offices in each of Ottawa and Toronto.
Senator Tkachuk: Did they staff them?
Mr. Doucet: Yes.
Senator Tkachuk: One person; two?
Mr. Doucet: I think the Ottawa office was a very small office. The Toronto office was larger.
Senator Tkachuk: When they terminated their initiative in December of 1991, was that because they - I know what you said earlier on and I'm trying to remember what's in the public domain. What's in the public domain is that one of their goals was they'd like to own the airport building that they were developing; am I right here or wrong here?
Mr. Doucet: I don't recall any of that being in the private - in the public domain, but I can tell you this; maybe that will help, they have - they had been and they have to this day, I believe, as a mission, to be involved both in cases where they are the de facto owners of the physical plant and in cases where they are not, where they are simply the managers.
Senator Tkachuk: Do they like to be a majority owner?
Mr. Doucet: I couldn't comment on that. I really do not know. I do not know.
Senator Tkachuk: So it seems to me they were just a little upset because the thing had taken so long after the announcement that the government was going to move, some 17 months later there's still nothing happening.
Mr. Doucet: I think that is correct. As I said in my presentation, what I recall being in the public domain then was expressions of regret that the process was so slow and their fear that an RFP would ever issue. And I suppose, came on to the end of the year and I suppose it's budget time and they had to make decisions as to whether they should invest further in the prospect in Canada or move elsewhere, and they chose to do the later.
Senator Tkachuk: I'm puzzled by parts of your statement on page 3, item 2, your contract with Matthews Contracting Inc. regarding the national highways system.
Mr. Doucet: Yes.
Senator Tkachuk: You mention in there that you were made aware by the PCO - that's the Privy Council Office - "that an Access to Information request had been made to obtain copies of invoices issued pursuant to a contract which our firm had entered into on May 4, 1992".
Now, PCO is the Privy Council Office; the Prime Minister's Office?
Mr. Doucet: No. The PCO is where the bureaucracy department of the Prime Minister...
Senator Tkachuk: Okay. Who would make that - who made the request?
Mr. Doucet: I do not know since they do not have to disclose who makes the requests under Access. As I understand the process, anyone can make a request under Access to Information and the person or agency making the request does not have to be publicly known. What has to be publicly known is that which they wish to access.
Senator Tkachuk: Then help me out here: You're a consulting firm or lobby consulting firm, you're doing business with a contractor, private sector person in Toronto on a highway contract. This highway contract, is this for Ontario?
Mr. Doucet: This is national.
Senator Tkachuk: National? How would anybody - like how would a person know that the government had - like how would anybody know that these copies of this, these invoices, were actually at the Privy Council Office or in the government?
Mr. Doucet: As I said in my statement, I am uncertain as to how precisely these invoices found their way to the PCO. And I go on to say "although it appears it may have been through the Nixon Inquiry even those these invoices had absolutely nothing to do with the Pearson project."
Senator Tkachuk: I got that part of it, but let's say that they were mistakenly sent to the Nixon inquiry.
Mr. Doucet: Yes.
Senator Tkachuk: How would an outside person know that they existed in the Nixon files?
Mr. Doucet: I have no idea. I do not know the answer to that.
Senator Tkachuk: The only person who could have had these invoices were really the Nixon files themselves because you certainly wouldn't have been mailing these around to other government departments and putting ads in the paper, you know.
Mr. Doucet: I don't know the answer to your question. As a matter of fact, as I go on to point out, when we were made aware that these requests under Access had been made, we objected to their disclosure, and I think that's in one of your tabs that I've submitted. We retained counsel and we had them do a démarche to try and prevent these from being in the public domain because they contain privileged, commercial information that ought not to be - that were not intended to be, by client or by consultant, in the public domain. And we wondered as well how they had come by that, and we also wondered how others had come to know that they had gotten there. But we never got the answers to any of that so I am ignorant.
Senator Tkachuk: Help me here because I don't know much about the Access to Information federally. When people write to get information, do they write - who do they write to? Do they write to PCO? Do they write, "Dear Prime Minister; I want this document", or like what do they do?
Mr. Doucet: I'm not an expert. I don't think I've ever made a request under Access to Information.
Senator Tkachuk: But isn't there an official body that handles these requests?
Mr. Doucet: Yes. I think that every large department - at least when I used to work in government every large department had a unit that dealt with requests that were submitted to them for information, and that became Access to Information. Now, because the Privy Council Office is a central agency for all the government, then it would only be to be expected that they could be the target of such letters, more so than say an innocuous department would be.
Senator Tkachuk: My view would be that they'd have to be, the person making the request, from what I know of - in Saskatchewan we had initiated legislation on freedom of information, so - but, again, it may be so different. Someone would have to be fairly precise. You wouldn't just put a letter in to the government saying, you know, send me everything you know about Fred Doucet, you know. You'd have to make reference to an invoice.
Mr. Doucet: Yes.
Senator Tkachuk: The amount, what it's for, maybe even what department, where it would reside.
Mr. Doucet: M'hm.
Senator Tkachuk: I don't want to dwell on this. It's just that I wonder about what government - what other invoices they give out.
Mr. Doucet: I should note, and it is in your tab, and I've made reference to it in my statement, that ultimately Access ruled that the amounts on the invoices be whited out. And indeed, in the documentation that your counsel has sent me, they are whited out. In the ones that I submitted to the committee, I've laid it all out. I have unwhited it.
Senator Tkachuk: That's real big of them though, eh?
Mr. Doucet: Well...
Senator Tkachuk: If I leave a bag of documents in a government office and I forget it there and in there is invoices, then they have the right to hand out my stuff? Like wouldn't someone like phone you and say, "Mr. Tkachuk, we have your documents here"? Would you not have expected that you would get a letter saying they were there?
Mr. Doucet: Oh, pardon me. No, they absolutely did that. They absolutely did that.
Senator Tkachuk: After they got the request or before?
Mr. Doucet: After they got the request.
Senator Tkachuk: But not before. You didn't know that they were there.
Mr. Doucet: No.
Senator Grafstein: How would they know?
Senator Tkachuk: They knew, and someone else knew they were there because otherwise why would you ask for Fred Doucet's document out of the PCO unless you knew they were there in the first place? I think that's the point I'm trying to make here. I may not be successful.
Anyway, I'd like to continue. The relationship - well, let's skip the highway stuff here. I don't really care about that.
Let's go to the Terminal 1/Terminal 2 project where you repeat I "had nothing to do with the Pearson project and were duly registered with the Lobby Registry as to their focus." You're referring to the contracts with AGRA and others. And then, you go to Paxport Inc. on number 4, page 5. After the selection of the Paxport proposal as the best overall proposal, you mention you were approached by Paxport in December of 1992.
Mr. Doucet: Yes.
Senator Tkachuk: Why would they pick you?
Mr. Doucet: Well, I'm going to speculate here, but I think I'll be closer to being correct than wrong. For starters, I had done work with the Matthews Group on the national highway system, for instance. They knew of our firm through the work that we had done on that project. As I point out, this was a huge project, a project with a potential much more vast than the Pearson redevelopment project by a factor of 15 to 20. It was a huge project. So they would have seen us at work and, hopefully, they would have been sufficiently impressed to warrant our being considered for work in other areas. When the opportunity seemed to be coming up that they might proceed with a successful contract negotiations that would have positioned them to expand with the devolution program across Canada and internationally, then I suspect that they sought us to help them for those antecedents.
Senator Tkachuk: And Paxport International?
Mr. Doucet: Well, the same thing. The Paxport International contract that we had, had, as its major assignment, the positioning of Paxport in the international context, that is to say, using the technological advances they would have made through their experiences in Canada and exporting that to the world. Mr. Neville this morning, I think, provided testimony that the market projections for such airport opportunities around the world was immense; in the multi, multi billions of dollars. He quoted a figure; you have that in your records.
Senator Tkachuk: When you talk about these two contracts you mention they're contingent on Pearson Development Corporation completing its negotiations on the Pearson - on Terminal 1 and 2. It would start after Terminal 1 and 2, hopefully, had come to a successful conclusion.
Mr. Doucet: The contract was to begin, took effect, on the day that the new management group would have moved in, as it were, and, as I understand it, that date was October 7 of 1993. The work that I did prior to that, because the contract was effective - was signed, rather, on February the 1st, and indeed I registered a month or so before that, because Jack Matthews and I had had our discussions. He had told me that we would in fact enter into these contracts. I didn't have them signed and they only got signed the 1st of February, but I knew that I was on. So I began to lay out, with the help of my colleagues at the firm, what our assignments were and to prepare the way, assemble the team, that would then carry out the work that I've described here.
Senator Tkachuk: When you signed these contracts you had certain undertakings with other companies that you had to comply with. Sagegate; is that right?
Mr. Doucet: Yes.
Senator Tkachuk: So when you received a fee here, on page 7 -
Senator Grafstein: I don't mean to interrupt your questioning, but do we have any information about Sagegate other than what we've heard from the witness? This is a new name. I don't see any documentary evidence of Sagegate. Is there any in the record somewhere to give us some tie to Sagegate?
The Chairman: Maybe the witness can help us.
Senator Grafstein: You're referring to something in documents about Sagegate.
Senator Tkachuk: Well, on page 7 he makes reference to it. We make reference to unsigned documents over the last three months -
Senator Grafstein: I don't see, in any of the documents, the word "Sagegate".
Senator Tkachuk: - and I have no problem with that.
Senator Grafstein: Is that somewhere that we don't have? We do have it?
Senator Tkachuk: Page 7 of his - he makes mention of Sagegate here.
Senator Grafstein: I thought you were referring to a document about Sagegate.
Senator Tkachuk: No, no.
Senator Grafstein: That's just based on the testimony?
Senator Tkachuk: Yeah, on his testimony.
Senator Grafstein: Okay, fine. So there's no other agreement dealing with it?
Senator Tkachuk: No.
Mr. Doucet: Mr. Chairman, may I enter to offer a -
Senator Tkachuk: We're here for information. You do whatever you want.
Mr. Doucet: In one of your tabs, in your Tab 3, there are copies of the invoices that were submitted to me by Sagegate.
Senator Grafstein: I'm not sure what tab. Unfortunately, Mr. Doucet, we've got lots of Tab 3s. Which Tab 3?
Mr. Doucet: In what I have submitted to you.
Senator Stewart: Here it is.
Senator Grafstein: Okay, fine.
Senator Tkachuk: My question is; you had an undertaking with Sagegate. So you would bill - help me out here. You're billing $8,700 - let's say the rains fell, the crop grew and all these things that happened didn't happen and you were happily working at Paxport International and whatever, and you receive $8,700 and $8,000 from the other company; one for Paxport International work and one for work that you're doing in Canada.
Mr. Doucet: Yes.
Senator Tkachuk: What do you do with that money now? I don't mean your part. You state obligations here. I'm trying to get an idea of what they are.
Mr. Doucet: For starters, the firm pays half of that amount to Sagegate for the major assignment that they will have pursuant to the assignment that we have, number one. Number two, we then negotiate a mandate with our other affiliate company in the U.S., the name of which I've identified here, and I've supplied information on our -
Senator Tkachuk: Powell, Goldstein.
Mr. Doucet: Yes. This is a major firm in Washington. The managing partner at the time was Stu Eisenstadt who had been the senior policy advisor to President Carter and subsequently, under President Clinton, became the U.S. Ambassador for the European Community. This was a large, well known firm in Washington with whom we had forged an alliance. The basis of the alliance was that as we moved into international projects, more of which we were gaining during those years, that we would work together.
And as I note in my remarks, we had not discussed what the sharing arrangement would be pursuant to the Paxport International and Paxport Incorporated contracts, but it was largely on account of those alliances that I was able to successfully negotiate these contracts, because the team that I was able to assemble was indeed a formidable one in terms of exporting Canada's expertise around the world. And so the sharing of the total pie which you have identified would have been done, in the first instance, 50 per cent of the overall amount to Sagegate.
Senator Tkachuk: Leaving you with $8,350.
Mr. Doucet: All right. That would then have been shared with the - the amount of which had not been negotiated as to what the sharing would be - with the U.S. firm. And as we would have moved into the various capitals of the world where airport devolution was likely, our plans were to invite other local groups, such as the Powell firm in Washington, who knew the terrain, as it were, in those countries, to come on the team as we moved country to country. This is a feature that is not unique for consultants as they try to export a technology around the world, and those were our plans. Now, what the sharing would have been on that and, indeed, who those firms would have been, I can't tell you. But at the end of the day the pie, which was finite and is established pursuant to these contracts, would have been divided up. And our firm would have done all right, but it would have been a reasonable amount.
Senator Tkachuk: After hearing testimony from you and Mr. Metcalfe, I think Mr. Near is probably making some phone calls today.
If you had signed this contract February the 1st of '93, there's contract negotiations, there's - well, I shouldn't say that. There's consultation going at this time and negotiations later on in '93. You would have a self-interest in seeing that the T1T2 negotiations with Pearson Development Corporation - Mergeco, Pearson Development Corporation, T1T2 Pearson Partnership Limited - I can't believe I actually did that, and I still probably missed one or two - was taking place. You'd have a self-interest. Did the success of Mergeco/Pearson Development Corporation mean that Paxport contracts would then come into effect whenever? Is that...
Mr. Doucet: Well, I can't define for you or comment on the basis of the association that created Mergeco.
Senator Tkachuk: I'm not asking you to do that.
Mr. Doucet: But our contracts with Paxport Incorporated and Paxport International were only going to be triggered at the moment that the new management team, whatever it was, moved then to Pearson Airport Terminals 1 and 2. I had no mandate; none, to be involved in the contract negotiations in 1993. My focus was to ensure that by the end of that process we were ready to be further involved in a number of Canadian airports. And I want to bring to the attention, because I have not heard it in the testimony so far - maybe I haven't seen it at all but maybe it's been reported - that I believe the list of Canadian airports that were targeted for devolution was 25; 25 airports in Canada. At that point, if my memory serves me right, there was only Vancouver that was officially LAA'd, as it were. Targeted as well were Calgary, Edmonton and Montreal and, indeed, since then they have been concluded, and maybe others. But there was a long list of potential airports in which any company that would have won the Pearson activity would have wanted to use the technology of it to ensure that it could compete for other management opportunities or redevelopment opportunities across Canada.
In tandem with that, and buttressed with that technology, because it was so unique - and Mr. Neville reported this morning that this was a small group that had a claim to expertise in airport redevelopment. In tandem with that we were also wanting to position Paxport International to do well in its competitive enterprises outside of Canada.
Senator Tkachuk: Well, I'll take your word for it.
Mr. Doucet: I hope so.
Senator Tkachuk: But surely, you know, maybe in the dead of night or when you get up early in the morning, weren't you thinking, "Gee, I wonder how those negotiations are going between the Government of Canada and Pearson Development Corporation"? I mean you were assembling the team, you're getting ready, hopefully that they would be complete.
Did you meet with people or did you talk to people about how the contract was going or how the negotiations were going? Did you keep yourself apprised of what was happening?
Mr. Doucet: The people that I spoke with that were in my so-called network were not on the negotiating team, with the exception of the client with whom I spoke regularly throughout. After all, they were my client.
Senator Tkachuk: Yes.
Mr. Doucet: But as far as the so-called government side, I was not involved in the negotiations and, at best, I would come by some information as to the process, most of which came through the public perception of what was being reported as a process.
Senator Tkachuk: So did you work with Mr. Neville at all during this time period?
Mr. Doucet: No. I see Mr. Neville frequently. We have a common enterprise, we own horses together, so I see him regularly; I saw him regularly, but that was not the subject of much discussion. I think I heard Mr. Neville himself say that he was not part of the negotiation team. So I suspect that the information he was getting about how that process was going would have been, again, through what was commonly known everywhere.
Senator Tkachuk: So let's fast forward a little bit. I'm sure there will be other questions and I'm close to - I just want to just talk about this for a moment.
Liberal government wins - you know, there was controversy during the election - Liberal government wins. Did Mr. Nixon - why did Mr. Nixon want your documents, or want your invoices? You mentioned that those other ones mistakenly may have gotten to the Nixon... How did that happen?
Mr. Doucet: I have no direct knowledge on what Mr. Nixon wanted. Mr. Nixon never contacted me before, during or after his inquiry. So I am guessing that the invoices that I've referred to, which had nothing to do with Pearson, that were part of a contract with the Matthews Group on the national highways system project, somehow got into the custody of Mr. Nixon - and I don't imply irregularly here - through the inquiry process. But I'm guessing on that, I don't know that for sure. Whatever -
Senator Tkachuk: Did you have a top ten list to send copies of your invoices to or would you only have sent them to one place and they'd be in your office and somewhere else, eh?
Mr. Doucet: As I said in my statement, I consider the contracts that I sign with clients and the invoices pursuant thereto to be commercial confidences between consultant and client and not intended for public dissemination. And only because, in an attempt to dismantle confusion and clear the air, have I done so here.
Senator Tkachuk: So those copies of those invoices - Mr. Nixon didn't ask to talk to you?
Mr. Doucet: No.
Senator Tkachuk: Wasn't interested in what you had to say?
Mr. Doucet: I don't know about that.
Senator Tkachuk: Obviously, he didn't talk to you. Did he write to you? Did he ask you for anything like that?
Mr. Doucet: No.
Senator Tkachuk: Then copies of invoices, maybe mistakenly - I'm assuming here that if you're not in the habit of sending them out to other people that they would come from Matthews Construction and/or your own, somehow, inadvertently out of your own firm.
Mr. Doucet: Yes.
Senator Tkachuk: End up in the Nixon file, and then you get a letter from the PCO. Who sent you that letter saying, "We got an inquiry about - "? Didn't they say, "Boy is this ever odd. How did we get hold of these invoices?" They didn't make mention of that? They just said, "We happen to be in possession of the invoices"?
Mr. Doucet: They indicated that an Access to Information request had been made, they indicated that they had invoices that were obtained through the Nixon inquiry, and they indicated that unless I objected they were going to make those public. I then retained counsel, and I've entered a letter of intervention in the tabs, and we fought to have them refrain from public disclosure. We were only partly successful in having them white out the amounts.
Senator Tkachuk: Give me the time period.
Mr. Doucet: As to when that happened?
Senator Tkachuk: Just so we can put it in the record. You said "last year" in your document. I just want - was it a particular month?
Mr. Doucet: If you'll give me a second I'll try and find out -
Senator Tkachuk: Sure. I'll give you all the time you want.
Mr. Doucet: - what the exact date was.
I have a letter. It's in your very first tab, Tab 1, from Ciuineas Boyle, Coordinator, Access to Information and Privacy, Government of Canada, dated September 7, which is a response to an earlier letter from my counsel.
Senator Tkachuk: Sorry, what tab was that again?
Mr. Doucet: This is Tab 1. I'm sorry it's a letter addressed to Mrs. Ciuineas Boyle from my counsel, McCarthy Tétrault.
Senator Tkachuk: Yeah.
Mr. Doucet: And that's dated September 7, but there was activity before that because it begins:
Thank you for your letter of August 22, 1994. We are pleased you reached the conclusion that Section 27 of the Access to Information Act...does not apply to my client.
- et cetera, et cetera, et cetera. But I think the timeframe would have been August 1994; July-August, 1994, when I first learned that there was an Access to Information request.
Senator Tkachuk: Okay.
Senator Jessiman: Could I just ask one supplementary?
Your contracts are with Paxport Inc., correct? Your contract is with Paxport Inc. and Paxport Internationally?
Mr. Doucet: That's right.
Senator Jessiman: I want to talk only about Paxport Inc. That was the one that made the first bid, right? Now, I would like you to tell us if it's true that, notwithstanding that the lease transfer of Terminals 1 and 2 would never go to Paxport Inc. because their shareholders are now part of another corporation called Pearson International -
Mr. Doucet: May I, Mr. Chairman -
Senator Jessiman: - were Paxport Inc. still going to honour your contract?
Mr. Doucet: May I just try to clear a confusion? I think what I'm going to say doesn't fully answer your question. I'll try to get to it but I want to clear the premise maybe.
My contract throughout the period of time that I've indicated here, with effect in late December, 1992, signed on February the 1st, 1993, and registered back in December '92, have to do with Paxport Incorporated and Paxport International. I have no other contracts that bear on the airport -
Senator Jessiman: But they only commence when the lease - and I'm reading from the contract here - Terminals 1 and 2 at Pearson to Paxport. So you know and I know that would never happen because we have now Mergeco, which is another corporation.
Mr. Doucet: But senator, when I signed those contracts, to the best of my knowledge Mergeco did not exist.
Senator Jessiman: I understand.
Senator Grafstein: But it did.
Mr. Doucet: I'm sorry?
Senator Tkachuk: There was a letter of understanding -
Senator Grafstein: There was a letter of understanding on January 14.
Mr. Doucet: We're talking here December '92.
Senator Grafstein: December '92, no; but February the 1st '93, yes.
Mr. Doucet: But when I registered those contracts with the lobby registry, which we have a need to do when we undertake work, or expect to undertake work, contract or no contract, I did so - again I can check the notes, but I think it's December 22, 1992. At that time, to the best of my knowledge, Mergeco was not a creature.
Senator Jessiman: Yes, but my question is the fact that Mergeco - if they had received the lease transferred to Mergeco, was your client Paxport Inc. prepared to honour your contracts even though it itself would never get the lease document?
Mr. Doucet: That would have to be a matter of discussion between Paxport and Mergeco, I presume, and -
Senator Jessiman: You don't know?
Mr. Doucet: - and I fully expected my contracts to be honoured, somehow.
Senator Tkachuk: I have only a couple questions. I'm sorry, are you finished?
Senator Jessiman: I'm fine.
Senator Tkachuk: Okay.
During the election and previous to - I mean you've been involved in the political field and all the rest of it - there would have been, you know, there was a lot of talk that maybe the Conservatives wouldn't win the election.
Mr. Doucet: Would not win the election?
Senator Tkachuk: Would not win the election. There was even some talk during the election that the Conservatives wouldn't win the election, and there was polling to that effect, although just for a little blip there when Ms Campbell was around the country in August, people thought it would turn around. But, nonetheless, it wasn't a sure thing that the Conservatives would win the election.
So would you have, in your preparatory work here, would you have maybe met with some Liberals? Oh, I hate that word. Would you have met with some Liberals?
Senator Grafstein: You're saying "liberals" with a lower case.
Senator Tkachuk: With a high case.
Mr. Doucet: I don't recollect having met with anyone who identified himself or herself as such, but they may have been for all I know. I was not discriminating between the people that I met with. But I remind you that my mandate was not to do anything other than to prepare. It was a period, as it were, of latent pregnancy.
Senator Tkachuk: That I wouldn't know much about.
Mr. Doucet: Let me try to explain again.
Senator Tkachuk: Let's give it a try.
Senator Grafstein: Is that document in any of the papers that we haven't seen?
Mr. Doucet: My object was, during that period of the contract discussions, you know, December 7th to whenever things got signed - in fact December 7th to October 7th, I guess, that was when the transfer occurred - my quest during that time as a consultant to the clients was not to do anything other than to prepare for the day when we would move forward from that date, the date of the transfer of the leases. And so I had no lobbying to do; I had no public advocacy to carry out. Others had that charge, and I think one of the witnesses this morning very much had that charge; Mr. Neville. That was not my charge.
Senator Tkachuk: Thanks, Chairman.
The Chairman: Before we proceed, there's need for a little clarification here.
Mr. Nelligan: I thought it might assist senators if I put two points on the record. The first is you will notice that in the material we distributed as to lobby registrations we were astute enough to provide you with the lobbyist registrations for Construction, Angkor Inc. and for R.L. Coolsaet. The reason we were able to do that is that when we were asking for the registrations with respect to the corporations of which we were aware, we were advised by the officer at the lobbyist registry that she was including the printouts relating to these other two companies because inquiries had already been made with respect to these clients in relation to the Pearson inquiry. So it would appear that there were inquiries being made as to the connection to Mr. Doucet with those two companies prior to this inquiry beginning.
I would also point out to the senators that, as Senator Jessiman has said, the contract that Mr. Doucet has given us is specifically with Paxport Inc., and, of course, Paxport Inc. was not a party to the ultimate contract. But in the materials filed with the House of Commons committee at an earlier date, it would appear that Mr. Matthews lists, first of all, lobbyists that he paid, which include Mr. Doucet, and when the consultants are listed he has a government business consulting group, F. and G. Doucet, listed as a consultant under Paxport, and he has Fred Doucet Consulting listed under T1T2LP, which was the ultimate Mergeco.
I simply bring that to your attention. That may be part of the confusion or part of the answer, I don't know.
Senator Tkachuk: Would you help me out? When the inquiries were made regarding these particular Matthews invoices they were made regarding the inquiry before the inquiry?
Mr. Nelligan: No, no, we weren't asking for the invoice at this point. We were simply searching the lobbyist registry to see how Mr. Doucet was registered vis-à-vis the Matthews companies. We, of course, were not aware of the existence of the two companies that were mentioned here, but the officer at the lobbyist registry gratuitously sent us those because she had already been asked for them by somebody else. So there have been inquiries made about these in the past. I just pass that on. I don't know what value you can put on them.
Senator LeBreton: She didn't know by whom?
Mr. Nelligan: You never hear these things.
Senator Grafstein: Can I just make an addendum to counsel's comment? In the document that's been provided today we have two agreements, not one. One agreement is with Paxport Inc. and the other is with Paxport International. And so we have both these documents and these have been provided to us by Mr. Doucet, based on his testimony, to explain the differences between the two and the application of the two. So that we have those documents and in addition to that we have a portion of an affidavit given by Mr. Desmarais that refers to these contracts and I don't know if we've earlier referred to that or not.
And then, in addition to that, we have the Mergeco agreement, January the 14th, which we've talked about before. I assume that those are the relevant documents to clarify Senator Jessiman's question, because I intend to - I'm still not clear about that but I'll come back on that. It's quite confusing.
Mr. Doucet: I'm not aware of any Desmarais - I don't have in my possession and no one has served me any documents having been authored by Mr. Desmarais.
Mr. Nelligan: No, all Mr. Desmarais did was attach certain documents which were in the possession of the Department of Justice to an affidavit in litigation.
Senator Grafstein: This is part of public record in terms of some litigation, but we'll provide you with a copy, and it's a letter that you signed. So if you haven't got that, I intend to deal with it, so we'll make a copy for you now.
Don't provide him with it now, I don't want to confuse him, but when we have an opportunity, we'll bring it forward.
Senator Tkachuk: Thank you, Chairman. I'm done.
The Chairman: Senator Hervieux-Payette.
Senator Hervieux-Payette: Since I was not around Ottawa when you were Chief of Staff and you provided us with your history from 1960 to 1995, not going back to the beginning when you were a school teacher, a few years ago. So from item (f) to the end, could you tell us the year you were occupying these positions?
Mr. Doucet: Starting with what?
Senator Hervieux-Payette: Chief of Staff.
Mr. Doucet: That would have been from '83 - the period covering a part of '83 and a part of '84. And the Senior Advisor to the Prime Minister, part of '84 to a part of '87. Ambassador and Chairman of the Summits Organizational Committee, from '87 - part of '87 to the end of August '88. President of FDCI - you want me to go on to the end?
Senator Hervieux-Payette: Yeah.
Mr. Doucet: President of FDCI from '88 to '92, end of. President and CEO of GBCG, the start of '93 to the end - sorry, start of '93, that should be to the end of '94. And finally, the latter, the start of '95 to the present.
Senator Hervieux-Payette: Then for FDCI and GBCG, the first, and the other FDCI, could you tell me the ownership? I mean, were you alone; how many partners you had in the first one, '98 (sic) '92, how many people were working with you?
Mr. Doucet: The ownership of FDCI?
Senator Hervieux-Payette: Yeah. Were you the only sole owner and how many employees?
Mr. Doucet: Well, FDCI evolved over a period of time. When I started it I was alone, and when I changed the name of it, and indeed because -
Senator Hervieux-Payette: You mean from '93?
Mr. Doucet: From '88 to the end of '92 I was President of FDCI. And from the start of '93 it became known as GBCG.
Senator Hervieux-Payette: Yeah. And then how many were you?
Mr. Doucet: Well FDCI evolved itself from one, and I'm going from recall here, but I would expect that by the end of '92 there might have been eight, nine, ten people.
Senator Hervieux-Payette: Okay.
Mr. Doucet: And then as we moved to GBCG through to the end of '94, between part- and full-time staff it may have been 15 or maybe even a bit more than 15.
Senator Hervieux-Payette: And you were the only owner?
Mr. Doucet: Yes.
Senator Hervieux-Payette: Okay. And the new FDCI?
Mr. Doucet: The new FDCI? The present FDCI is again just me.
Senator Hervieux-Payette: Okay. Thank you. From some of the information that you supplied to us I'd like just, even though they came late, during my colleague's interrogation, and I had a few minutes to go through them, I'd like to ask a few questions, if I can find the proper document.
You submit, I think it was under Tab 2, I mean, the lobbyist list for Terminal 1 and 2 project. It's a list that has also some numbers. So it's 00637. So I guess you got them from the same bank as we did.
Mr. Doucet: In fact, I got it from your counsel as part of what I understood was the entirety of the documents that you would be relating to today.
Senator Hervieux-Payette: I have a list of 48 names. Some of them comes back a few times but I would say most of them just once. Would you recognize these names as being people that have worked with you on Terminal 1 and 2?
Mr. Doucet: I'm not sure what document you're quoting.
Senator Hervieux-Payette: The one that is under Tab 2, I mean the list that you yourself inserted in your own document.
Mr. Doucet: Yeah. Starting with J.A. Doucet?
Senator Hervieux-Payette: Starting with Pascoe and then Hession, Duguay, Woods, Malloy, Angus, Metcalfe, Dyer, Near, Fox, Doucet, Wilkins, Blais, Little, Doucet, Charbonneau.
Mr. Doucet: You want to know what, precisely, senator?
Senator Hervieux-Payette: I would like to know if all these people have worked with you or if they've worked on the project. I mean, did you work all together I mean, with Terminal 3, or did you work one against another? I mean were you all part of the same team at one point or another?
Mr. Doucet: Well, the document that I'm looking at identifies the lobbyists by name and the firm by name and the client by name.
Senator Hervieux-Payette: In this case, most of them, I mean, are either Paxport, but what I cannot know, are they, to your recollection, people that you've worked with, or at least that were working on the - see, there was Paxport first and then there was Claridge and then that was Mergeco. So at one point I guess the team of lobbyists teamed up as well because the companies teamed up.
Mr. Doucet: Well, senator, from this list, the only people that I see that worked with me are the ones who are members of my firm, and I refer there to Airenco and the corporation of the City of Mississauga, neither of which had any relation to the object of your committee's work.
Senator Hervieux-Payette: Okay. Because along with that, I mean, and this is also part of your documentation, we had a copy of the registry, of the official registry, and I was looking at names that were not coming on that list. I was wondering just to get some information. Like, I have the name - there is no number, but it's the first page just right after the cover page, the name of Mr. Pierre Fortin, Frederick Sheffer, and Michael Teeter. Since they are not on the long list, are they people who worked with you?
Mr. Doucet: What document is that?
Senator Hervieux-Payette: Your document. It was in your -
Mr. Doucet: What tab?
Senator Hervieux-Payette: Tab 4, right after the cover page.
Mr. Doucet: I'm with you now.
Senator Hervieux-Payette: The names I'm pointing to you are those who were not on the list I mentioned before. So I mentioned Pierre Fortin, Frederick Sheffer, and Michael Teeter, so these were people working with you?
Mr. Doucet: These were people in the employ of Government Business Consulting Group.
Senator Hervieux-Payette: And who worked on the various contracts, because we have several contracts that we're talking about, but contracts of your firm related to the airport.
Mr. Doucet: Not necessarily.
Senator Hervieux-Payette: Not necessarily?
Mr. Doucet: Not necessarily. If we're looking at the same page, this one -
Senator Hervieux-Payette: Canadian Airports Limited.
Mr. Doucet: Yes. In that case, these people did work with me on the Canadian Airports Limited group. That's correct.
Senator Hervieux-Payette: Okay.
Mr. Doucet: But that, I've referred in my opening remarks to -
Senator Hervieux-Payette: It was with the British group.
Mr. Doucet: That's right.
Senator Hervieux-Payette: I understand. Then we go to the second page with the Paxport. Well, I have two other names -
Senator Jessiman: Where are you reading now, please?
Senator Hervieux-Payette: The second page. Just follow up the number. I have not changed the order of the pages that come from the registry.
Then I have Mr. Riopelle, Mr. Fox, Mr. Legate, and I mean, it's your page, so I was wondering - I mean, and it's related to Paxport Management, and there is nothing related to your firm. I mean, all these people obviously were working for Paxport Management and registered for it, but I don't see your name. It's the second page. Sorry, the third page. Third page. It's on the third page.
Senator Jessiman: There are two names there?
Senator Hervieux-Payette: There are five names from - okay. I just want to understand the documentation that you provided us.
Mr. Doucet: Sure. If we're looking at the same page, it has "extra info" written across it?
Senator Hervieux-Payette: Okay. On the third page.
Mr. Doucet: The names of those people are all associated with the firms that are identified under firm, and my firm, GBCG or FDCI does not appear there.
Senator Hervieux-Payette: You are on the other page.
Mr. Doucet: On the next page, yes.
Senator Hervieux-Payette: Again with Paxport, but Paxport Inc.
Mr. Doucet: That's correct.
Senator Hervieux-Payette: Not Paxport Management Inc. So there were two different legal entities, I suppose?
Mr. Doucet: No. The next page is Paxport Inc. Yeah.
Senator Hervieux-Payette: That's why you are on a separate page?
Mr. Doucet: Well, I think if you look at the dates of registration, entrée en vigeur et fin d'engagement, you will see that there are variances there as well. People come and go on files, and as they do, it is incumbent upon them to register that activity with the lobby registry. And I think that if you examine the right-hand columns of the page that has "extra info" written across it, you will find that the dates of entry and departure could be different than the next page, which is an account of the - of myself and Andrew Pasco registered on, again, different dates representing different companies.
Senator Hervieux-Payette: Well, 23rd of December, 1992. Exact?
Mr. Doucet: In my case.
Senator Hervieux-Payette: In your case?
Mr. Doucet: Yes, which is what I referred to in my opening statement.
Senator Hervieux-Payette: After the contract was not awarded, but was being discussed with Paxport.
Then we go to the next one with Construction Angkor.
Mr. Doucet: Yes.
Senator Hervieux-Payette: We have Mr. Edmond Chiasson.
Mr. Doucet: Yes.
Senator Hervieux-Payette: He is part of your team?
Mr. Doucet: Yes.
Senator Hervieux-Payette: Okay. He was not on the long list that I had referred to at the beginning.
Mr. Doucet: That's right. See, different consultants in our firm are assigned to different files.
Senator Hervieux-Payette: Okay. Mr. Chiasson comes back again with Coolsaet, I suppose.
Mr. Doucet: Yes.
Senator Hervieux-Payette: Of Canada Limited.
Mr. Doucet: Yes.
Senator Hervieux-Payette: And these are all companies related to Terminal 1 and 2 development?
Mr. Doucet: No, no. As I said in my opening statement, the only reason, and I've not succeeded obviously, is to attempt to diffuse and dismantle the misunderstandings. Coolsaet and Angkor, senator, had absolutely nothing to do with the Pearson project in any way, shape or form. The assignment given by Coolsaet and Angkor was the promotion of the national highway system.
Senator Hervieux-Payette: Okay. Thank you.
Mr. Doucet: The only reason I have divulged this in the context of this committee is to try and clear the confusion, and I've gone all the way inclusive of indicating what resources of our firm were assigned to them.
Senator Hervieux-Payette: It's important to know who is who and who is doing what, because even your firm changed names over the course - over a number of years. So I think it's important that we know.
May I ask if you - since Terminal 3, I mean, was completed February, '91, were you in any way or shape related or had any lobbying in relation to the Terminal 3 contract? When the Terminal 3 request for proposal, and I mean, did you work with one of the -
Mr. Doucet: Yes, I did.
Senator Hervieux-Payette: - parties?
Mr. Doucet: Yes, I did.
Senator Hervieux-Payette: May I ask for which group you were working?
Mr. Doucet: I've already identified in my opening statement that in March, 1990, we were recruited and eventually served as a government relations consultant for British Airport Authority, and it became known as Canadian Airports Limited. That assignment terminated in December, '91, three months before the issuance of the RFP, but we maintained our registration with the lobby registry throughout 1992, up to mid December, 1992. Post award.
Senator Hervieux-Payette: In your preliminary -
Senator Grafstein: Post award?
Mr. Doucet: Post award. Post the termination of the best overall bidder.
Senator Jessiman: Not award. I now know that.
Senator Hervieux-Payette: Of the other parties, because we know that all these contracts were awarded to large consortium, were you under contract with any other of the companies that were part of the consortium or the consortia that were formed by either I would say Paxport, because I guess it's - it was your client, but did you have any contract with Allders International?
Mr. Doucet: No.
Senator Hervieux-Payette: I'm just going to give you the names of the party.
Mr. Doucet: Yeah. No.
Senator Hervieux-Payette: With AGRA Industries?
Mr. Doucet: You mean did I have a contract with them unrelated to Pearson?
Senator Hervieux-Payette: Unrelated to Pearson, but you know these group, because they were already, I mean, part of that team that you had the knowledge with.
Mr. Doucet: But any contracts? Are you asking me if we had -
Senator Hervieux-Payette: Outside of the Pearson airport. If there were parties that - because I mean they are entities that regroup. You may have worked with them for other mandate.
Mr. Doucet: Yes.
Senator Hervieux-Payette: That's my question.
Mr. Doucet: Yes.
Senator Hervieux-Payette: Did you have other mandate from AGRA?
Mr. Doucet: Yes. In the case of AGRA, I've disclosed that, in my opening statement, page 5 of my opening statement, that our firm had a contract with Airenco Inc. (AGRA) focused on a possible private sector consortium proposal on runways development at several Canadian airports. And I've identified in your tab 4 when we registered and when we finished our work pursuant to that contract.
Senator Hervieux-Payette: Okay. And I'll just finish the list of the members of the Paxport consortium, which is NORR Partnership?
Mr. Doucet: No.
Senator Hervieux-Payette: Did you have any contract with that company? Sunquest Vacations Limited?
Mr. Doucet: No.
Senator Hervieux-Payette: Bracknell Corporation?
Mr. Doucet: No.
Senator Hervieux-Payette: CBIC, Wood Gundy, or Wood Gundy? I know that the name was -
Mr. Doucet: No.
Senator Hervieux-Payette: And Ellis-Don?
Mr. Doucet: No.
Senator Hervieux-Payette: Did I mention - I think I mentioned Allders International.
Mr. Doucet: And the answer is no.
Senator Hervieux-Payette: Okay. Thank you. I will go to your remarks, because I was a little bit - in page 6 of your remark, at the bottom of the page, you were mentioning:
The Paxport Inc. contract was intended primarily to advise on other Canadian airport opportunities as the airports' devolution program progressed over the next decade.
Could you tell me to which airport devolution program you're referring to?
Mr. Doucet: The Canadian one.
Senator Hervieux-Payette: Which one? Because, I mean, I am aware of one policy, and we have discussed that policy with the technocrats and the various people, the ministers, Minister Lewis, and to my recollection, we were given an official policy with some revision at a later date called a new policy concerning the future management framework for airports in Canada, plus a supplementary principle for the creation and operation of local airport authorities. This was, under the Conservative government, the official airport policy.
So you're talking about a program of devolution of airports, and I don't see in any of the government policy any program for airport devolution. So I'm saying there might be a program that you were aware of, but our committee has never been informed that there was a program for devolution of airport.
Senator Tkachuk: We have the policy of -
Senator Hervieux-Payette: They were not for devolution. They were for creation of local airport authority.
Mr. Doucet: That is precisely what devolution is about, senator.
Senator Tkachuk: That's devolution.
Senator Hervieux-Payette: Well, it has nothing to do with the privatization.
Mr. Doucet: I haven't said that.
Senator Hervieux-Payette: So.
Senator Tkachuk: You do devolve the airports.
Senator Hervieux-Payette: Did you work for a group that was formed to acquire a local airport authority?
Mr. Doucet: No.
Senator Hervieux-Payette: To become a local airport authority?
Mr. Doucet: No, I did not. Let me try and explain, senator. I know that it is confusing. The airport devolution program that I referred to in my notes incorporates the spectrum of prospects once the Crown removes itself from its traditional role of ownership and management of a facility. That is to say, the Crown devolves away from what it traditionally did.
Now, the result of that can take a multitude of tracks. One is that an LAA or a Canadian airport authority or some other rubric can be set up where the federal Crown is absent entirely or much less present. It can still maintain ownership, or indeed it can be absent from ownership. It can have a short lease or a long lease or no lease at all, if it sells.
In addition, devolution also makes possible that any such models operated à la LAA or Canadian airports authorities of whatever type could retain the private sector to come in and manage the facility by contract. That is all part of the possibilities that emerge once airports begin to devolve away from their traditional ownership and management by the Crown.
The Chairman: Mr. Doucet, you're saying that devolution of airports in Canada is an ongoing process.
Mr. Doucet: Yes, and I'm saying that it needn't all be à la Pearson type, nor does it need to be all à la Vancouver type. Vancouver may decide that they will devolve in a fashion that is respectful of the authority that it has and its devolution prospects. Montreal may choose a different model. Montreal may farm out all of the management. Vancouver may only farm out a bit of it. They may farm out something fully, other things not fully.
Senator Hervieux-Payette: Well, my understanding was that we were not going the privatization route with LAA, maybe some of the services that were already provided by the private sector, let's say maintenance, but that we would privatize other airports in the country. I thought the program was to go through the LAA route, and which was a sort of a devolution to the local authority made of various business groups, but not - in a non-profit corporation. So it's different from a Paxport. I've never heard that Paxport was a non-profit corporation since the hearing of this meeting.
Mr. Doucet: It certainly was not, and I don't wish to represent that they were. May I ask you a question?
Senator Hervieux-Payette: Yes.
Mr. Doucet: What is your concept of devolution? For instance, in your sense of devolution, who would manage the airport? Say in Vancouver? You know, we have a new LAA that is in place in Vancouver. It's a non-profit group. But then who manages? Who does the work?
Senator Hervieux-Payette: I think I will refer you to the hearings with Mr. Emerson to know how it works, because he explained that to us much better.
Mr. Doucet: Much better than I have, obviously.
Senator Hervieux-Payette: Much better than I can.
Mr. Doucet: I'm trying to say that everything is possible under an LAA. The LAA represents the so-called ownership group. It's non-profit.
Senator Hervieux-Payette: Okay.
Mr. Doucet: But under it, there can be a management contract let out, and, indeed, Paxport would have pursued such contracts.
Senator Hervieux-Payette: Okay. One of my last question, in the various contracts that you have tabled to us, and I'm just going to refer to the February, 1993 and the May, 1992, and you have two for February, 1993, you have a paragraph whereby they inserted in that contract about a bonus. And I must say, as a lawyer, I mean, that you would receive and sign a contract where the bonus would not be attached to or would not be predefined. And I will read it.
At the end of every twelve month period during this contract or any renewal or extension thereof, the client shall review FDCI's performance under this contract and if in the sole discretion of the client, it feels that a Bonus is warranted by virtue of the benefit obtained from FDCI's services or because of quality of FDCI's services for the client, it shall then make such a Bonus payment in such amount as it determines.
So this was an unknown quantity of fees or money that would be awarded to you at the discretion of your client, and it's a standard clause that you have in each of your contracts that you've signed with Paxport Inc. or Matthews or whatever.
Mr. Doucet: It is a standard clause that we have in our contracts, and it's totally at the discretion of the client. If they feel that we bring value added beyond what they had intended and they wish to say a special "thank you", we won't deny them the opportunity.
Senator Hervieux-Payette: In this case, I mean, did you receive a bonus?
Mr. Doucet: Absolutely not.
Senator Hervieux-Payette: You didn't receive a bonus.
Mr. Doucet: I didn't even get paid for my out-of-pocket expenses.
Senator Hervieux-Payette: Okay. Just the last question: Before December 7, 1992, you were active on the file.
Mr. Doucet: No.
Senator Hervieux-Payette: No. You just came -
Mr. Doucet: I was active - again, let me set the context. I was active on the file such as defined in my presentation, monitoring for Canadian Airports Limited, remembering that they had left and announced that they had left the year before and were not - did not respond to the RFP.
I maintained my registry with the lobby registry so that I could monitor what was happening. Because, you see, there was always a possibility, remote though it was, that at the end of the RFP process, that there would have been no selection made. I suppose that was always a prospect, you see. And if there had been no selection made, then, you know, conceivably, Canadian Airports Limited would certainly have wanted to have known about it and might have come back to respond to another RFP or whatever.
Senator Hervieux-Payette: So you started after January, 1993? I have here Government Business Consulting Group to Paxport Inc. on the monthly basis from January, 1993 to October, 1993.
Mr. Doucet: Yeah. I think you will find that the tabs will show that we registered both Paxport International and Paxport Incorporated on December 22, 1992. And we - sorry. Yes, December 22, 1992.
Senator Grafstein: To correct you, you earlier said that you only registered Paxport Inc., you didn't register Paxport International.
Mr. Doucet: I'm sorry, both. I think in my -
Senator Grafstein: You registered both, or you did not?
Mr. Doucet: I think in my statement I said we registered both, senator.
Senator Grafstein: I thought you said one. I assumed from your testimony. You can correct yourself.
Mr. Doucet: Let me quote from my written testimony.
Senator Hervieux-Payette: We will take it as written.
Mr. Doucet: I refer you to page 6, senator.
Senator Hervieux-Payette: From the minute you were active on the file, for the record, did you contact or talk or have phone conversation or met with the following persons -
Mr. Doucet: Sorry, senator. Which contract are we talking about?
Senator Hervieux-Payette: I'm talking about the contract you started and signed from December, 1992 with Paxport.
Mr. Doucet: Paxport Inc. and International?
Senator Hervieux-Payette: Yeah.
Mr. Doucet: Okay. Yes.
Senator Hervieux-Payette: I repeat. Just to mention the name of the following persons that you would have talked, phoned, or contacted or met with, with regards to the T1T2 contracts. Prime Minister Brian Mulroney.
Mr. Doucet: No.
Senator Hervieux-Payette: His chief of staff.
Mr. Doucet: No.
Senator Hervieux-Payette: The Clerk of the Privy Council, Mr. Shortliffe.
Mr. Doucet: I have no recollection of speaking with or meeting with him.
Senator Hervieux-Payette: Minister Corbeil.
Mr. Doucet: I have no recollection of meeting with the minister.
Senator Hervieux-Payette: Or his chief of staff or executive assistants.
Mr. Doucet: Yes. Yes.
Senator Hervieux-Payette: You met with?
Mr. Doucet: Chief of staff.
Senator Hervieux-Payette: Chief of staff. Other ministers of the Crown that you would have discussed this question with.
Mr. Doucet: I have no recollection of meeting other ministers or speaking with them on the subject.
Senator Hervieux-Payette: Parliamentary secretaries?
Mr. Doucet: I have no recollection of that.
Senator Hervieux-Payette: Okay. When did you hear of Mergeco? I mean, when you were hired, was this question clear? I mean, were you informed by Paxport that they were proceeding with a merger with Claridge?
Mr. Doucet: No. My best recollection on hearing about Mergeco is late January or February of 1993. And I think that I heard it through a public announcement first, so whenever that date was is when I heard it. I'm not sure. It certainly is not before well into January, and indeed it may have been well into February. Whenever the public announcement was made.
Senator Hervieux-Payette: So what was exactly -
Senator Tkachuk: Probably in Florida or something.
Senator Hervieux-Payette: - the scope of your mandate? Since we had quite a team of people on behalf of Paxport from other firms, I mean, in relation to these other lobbyists, I mean, what was your exact role? I mean, were you not stepping on each other's foot?
Mr. Doucet: You would have to ask Mr. Neville about that. I think he would have squealed if I had, literally.
My mandate was entirely different. Again, I say that my mandate was a prospective one. My mandate was to prepare the way for involvement in the continuing devolution of airports in Canada and then the step beyond, internationally. That would not begin until we first had finished the Pearson matter. That is to say -
Senator Hervieux-Payette: That's on the Pearson matter, I'm asking. If you had not finished it, I understand you would not do a second one. But for the first one, to help complete this one and sign this one.
Mr. Doucet: My mandate was - had nothing to do with the completing, indeed with the initiating. I was then working with a competitor during the RFP period, albeit less so in the last year, because they had left. I was simply monitoring for them, but I was registered for them.
The period during the time that the contracts were being negotiated, my activity was to prepare the way beyond the moment when they would move into Pearson, the Pearson airport, and begin to manage, and my invoicing only began at that point. First invoice to Paxport International and Paxport Incorporated was in November of 1993. Therefore, November and December. Cancellation occurred on the 3rd, I believe, of December, and no other invoices were submitted after that. And I suppose -
Senator Grafstein: You mean '94.
Mr. Doucet: No, '93.
Senator Hervieux-Payette: It is '93, because we have copies of -
Senator Grafstein: I'm sorry. Excuse me.
Senator Jessiman: I made a mistake once.
Senator Hervieux-Payette: We have copies to Paxport Inc., to Jack Matthews, I mean, June 15, 1993, so, I mean, the contract was not finalized with Mergeco at the time. July, August, so on. At that time, any way, there was no final project going on. I mean, there was a negotiation, but from - so you were at that time still working on the prospect of the second deal, even though this one was not concluded?
Mr. Doucet: I must say I've lost your chronology of events. Would you try again, senator?
Senator Hervieux-Payette: I look at the dates. You tell me that you were working for the future.
Mr. Doucet: Yes.
Senator Hervieux-Payette: I have copies for your consulting services that provided by you, and it's started in June 15, 1993, and one is for Matthews Group Limited and the other one is to Paxport Inc.
Mr. Doucet: Okay. Well, now we're talking about the Coolsaet Angkor contracts, not the Pearson, not the Paxport Incorporated or the Pearson International contracts. They had nothing, as I've said several times -
Senator Hervieux-Payette: You are the one creating the confusion, because I don't know that the account 1087 refers to that contract. I mean, you put that into it, in your pile of documents, for a contract that has nothing to do with this.
Mr. Doucet: Well, I apologize if I'm causing confusion. The intention, as I started from my remarks, by saying it was an attempt to clear them.
Senator Hervieux-Payette: Well. Because as I say, you put it to your own document, Paxport Inc., bill to Paxport, attention Jack Matthews, consulting fee for the month of January, 1993, $10,000, and it's June 1, 1993, and then it's account 1109, so.
Mr. Doucet: Senator, that was for the Coolsaet Angkor contract, not for Paxport Incorporated or Paxport International, which contracts I only signed at the dates that I've indicated.
Senator Hervieux-Payette: Well, since they have nothing to do with T1T2 -
Mr. Doucet: Why did I put them?
Senator Hervieux-Payette: I just wonder why you inserted them.
Mr. Doucet: I put them in, senator, because under Access to Information, they were released, and they caused great confusion in the press because people concluded that because they were part of the Nixon inquiry material that was somehow passed on to him, that they had something to do with the Pearson file. We pleaded with Access to Information that that was not the case, that that was an error, and because it was an error, it ought not to be put in the public domain.
I have gone a step beyond here by releasing the contracts pursuant to those, or at least the antecedent contracts of those invoices, in an attempt to clear up the thing to show that they had nothing to do with the Pearson airport project.
Senator Hervieux-Payette: You understand that I haven't had time to read the contract. You just gave that to us at the moment we were starting the session. So we will have to look into it and see the relationship between the contract and the invoices.
Mr. Doucet: I invite you to do that.
Senator Hervieux-Payette: You have to forgive us for not knowing exactly the rationale. I have finished my question.
The Chairman: Yes. There are a few of our western friends and others who are anxious. Are we agreed we're going to finish up by three o'clock?
Senator Grafstein: Mr. Chairman, if I'm the last questioner, I would hope to do that, subject to the caveat that my colleague has raised. We received these documents for the first time shortly before this hearing. Quite frankly, I've only had a chance to peruse them very briefly, and I intend to ask the witness some of these questions. Subject to recall of the witness at a subsequent time if we're not satisfied after we review the documents, we will try to conclude, you know, reasonably. Hopefully three o'clock, if I can start now. I do have an extensive list of questions, all of which arises out of his testimony, none of which is fresh or new, but it's all as a result of his testimony this morning.
The Chairman: Yes. Okay. I just want to make a comment that the arrival of documents on the day of or the night before a witness is nothing new to us, Senator Grafstein, if you've been here since July 11. And this is one of the first witnesses that we've had who has prepared himself not only thoroughly and provided documents, which he does not have to have provided, but -
Senator Grafstein: That's a moot question, Mr. Chairman.
The Chairman: It's a comment, having observed the witnesses that have come before us.
Senator Grafstein: I'm not suggesting I agree or disagree with the witness. I haven't had a chance to even examine that question as to what the requirement is of any witness to provide information, but I'll deal with what we have today. I'm just raising the caveat that we haven't had a chance to go through these documents in care or paginate them or coordinate them with the invoices and with those of others here, and if there is a question, I'm just saying that, as my colleague is, she may wish or others on our side may wish to ask Mr. Doucet to return arising out of information received today, but we'll try to cover the ground as best we can today.
The Chairman: All right. Proceed then. Go ahead.
Senator Grafstein: Thank you. May I? I take it that - no problem?
Senator Jessiman: I'm not going to ask any more questions.
Senator Grafstein: Just a brief question. We'll try to deal with this quickly. I'm sure you've been listening or watching these hearings, and you heard my colleague Senator Stewart try to position the various consultants with respect to their relationships with the government prior to and perhaps even during this consultancy period, and just let me ask the questions that he asked very quickly.
You were involved with the government in 1984?
Mr. Doucet: Yes.
Senator Grafstein: And you were involved in the transition of the government in 1984 beyond your responsibilities as chief of staff? The transition -
Mr. Doucet: I was not chief of staff for the government.
Senator Grafstein: No, chief of staff for the Prime Minister.
Mr. Doucet: No, I was not the chief of staff for the Prime Minister.
Senator Grafstein: You were chief of staff from 1984 -
Mr. Doucet: Leader of the Opposition.
Senator Grafstein: Leader of the Opposition. Were you involved in the transition, 1984, to the new government?
Mr. Doucet: Yes, I was.
Senator Grafstein: Fine. And you then continued from being the chief of staff to the Leader of Opposition to what role in the new government?
Mr. Doucet: Senior advisor.
Senator Grafstein: Senior advisor in the Privy Council Office or the Prime Minister's office?
Mr. Doucet: In the Prime Minister's office.
Senator Grafstein: I see. And what were your terms and references and responsibilities then?
Mr. Doucet: Largely to advise him on international - on the international aspects of his work.
Senator Grafstein: Did that also include advising him on domestic matters from time to time?
Mr. Doucet: From time to time.
Senator Grafstein: Fine. And we've heard your evidence, and I won't go over the ground, but in the transition of the new government from the Mulroney government to the Kim Campbell government, were you involved in the transition as an advisor, volunteer or otherwise?
Mr. Doucet: No, I was not.
Senator Grafstein: Were you consulted?
Mr. Doucet: Was I a consultant?
Senator Grafstein: Were you consulted by those people that were involved in the transition from the Mulroney to the Kim Campbell government?
Mr. Doucet: No, I was not.
Senator Grafstein: So you weren't involved in any way, shape or form in terms of the government process in the year 1994?
Mr. Doucet: No, I was not.
Senator Grafstein: Okay. Let me start back by -
Senator Hervieux-Payette: That was 1993.
Senator Grafstein: Sorry, '93. Excuse me.
Let me start back by just the confusion, because quite frankly, I am more confused now than I was before. Just your testimony on page 6, dealing with the two agreements, Paxport Inc. and Paxport International -
Mr. Doucet: Yes.
Senator Grafstein: You told us two things in your testimony, and one thing here, and I'm not sure which is which, so you can correct it. And that is, the Paxport Inc. agreement was signed on February 1, as was the Paxport Inc. International. One was registered. It says the former was registered, and then I take it from that that you did not have to sign or register the Paxport International agreement because it wasn't caught by, effectively, by the legislation. Now, that's what your testimony says. You responded differently to Mr. Jessiman, so the question is, what is it? Tell us, because I am confused now.
Mr. Doucet: Well, I think your premises are all accurate.
Senator Grafstein: Are we to take it that your testimony is the written testimony or your verbal testimony?
Mr. Doucet: I hope they are the same.
Senator Grafstein: They're not.
Mr. Doucet: Well, I think they are.
Senator Jessiman: Explain it to us then. Is the Paxport International registered or not registered?
Mr. Doucet: Paxport International was never registered, and I've indicated that.
Senator Grafstein: You didn't.
Senator Jessiman: That's what he has here.
Senator Grafstein: The transcript will be different. But we're trying to get - I want to get the record straight just so I can follow it. Now, these are two separate agreements.
Mr. Doucet: Yes.
Senator Grafstein: They were signed at the same time.
Mr. Doucet: They were signed at the same time.
Senator Grafstein: They were signed on February 1?
Mr. Doucet: That's correct.
Senator Grafstein: When were they negotiated
Mr. Doucet: In the days following - preceding December 22, 1992.
Senator Grafstein: So sometime before December 22, 1992?
Mr. Doucet: Yes.
Senator Grafstein: You negotiated these terms with -
Senator Jessiman: I thought before you said after.
Senator Grafstein: After or before? I'm sorry. We're talking -
Senator Jessiman: What I want is -
Senator Grafstein: He said before.
Senator Jessiman: All right.
Senator Grafstein: Senator -
Senator Jessiman: I didn't hear that.
Senator Grafstein: Let the witness conclude, and then at the end of it perhaps you can correct anything you want, or if I'm taking something out of the record that's inappropriate, you can do it. I'm just trying to clear my confusion. I'm confused now, much more confused now than I was before the witness started. So it's from his testimony that I'm confused, and his written record.
So when did you negotiate these two contracts that were dated February 1?
Mr. Doucet: I just answered that question.
Senator Grafstein: Give it to us again.
Mr. Doucet: Days preceding December 22, 1992.
Senator Grafstein: Approximately when?
Mr. Doucet: Days before. Few days before.
Senator Grafstein: Okay. So sometime after December 7?
Mr. Doucet: Yes.
Senator Grafstein: And before December 22?
Mr. Doucet: That is correct.
Senator Grafstein: Fine. Now, you were paid by BAA or Canadian Airports until when? When was your last invoice?
Mr. Doucet: In the early months of 1992.
Senator Grafstein: So you were registered until 1993?
Mr. Doucet: Yes.
Senator Grafstein: But payment stopped.
Mr. Doucet: That is correct.
Senator Grafstein: But you had a watching brief -
Senator Hervieux-Payette: That is correct.
Senator Grafstein: - for them.
Mr. Doucet: That is correct.
Senator Grafstein: How you were paid for that watching brief?
Mr. Doucet: I was not paid for that watching brief.
Senator Grafstein: What was your understanding? Were you doing that as a volunteer?
Mr. Doucet: Absolutely. I have no -
Senator Grafstein: Why would you do that?
Mr. Doucet: Because there were no other clients for me to have during that time. I had already made my decision as to which client I would try to help in the process of selecting the best overall. It was Canadian Airports Limited.
Senator Grafstein: Right.
Mr. Doucet: And they left, you know, which was regrettable for my firm, but they left three months before the RFP issued. And my best bet, I felt, at the time, from my company's vantage point, was to continue to offer to them a monitoring brief during the period of the RFP.
Senator Grafstein: So you've told us in your testimony that had this RFP process collapsed and the government decided that they weren't comfortable with any of these proposals, it's a possibility - your word was possibility - that BAA airports -
Mr. Doucet: I think my word was the unlikely prospect.
Senator Grafstein: Unlikely possibility. I'll use the word possibility. Okay.
Now, let's take a look at the contracts. And you correct me if I'm wrong because I'm trying to sum up quickly here what you've said. If I'm wrong, please correct me. You had one contract -
Senator Tkachuk: I just want to ask counsel as a point of information, because I'm not a lawyer, and I know Mr. Grafstein is. You are counsel. Is this a contract, i.e. a contract that isn't a contract? Just so that we all know what we're talking about here, this contract he's referring to becomes a contract when?
Mr. Nelligan: I thought he was talking at the moment with regard to his contract with BAA.
Senator Tkachuk: No, he's talking about the Paxport one.
Mr. Nelligan: The contract is an agreement to provide future services.
Senator Tkachuk: So it becomes a contract effective when?
Mr. Nelligan: When it's signed. But it's to provide future services.
Senator Tkachuk: Okay. So it's a contract now that doesn't take effect unless something else happens, eh.
Mr. Nelligan: Well, you have to take the language, but there is any number of agreements where you agree to provide Christmas trees to the T. Eaton store for the Christmas holidays. That's a binding contract, but you don't have to provide the Christmas trees for some time.
Senator Tkachuk: Okay. That's good. That's very good, actually. Thank you for that. Go ahead.
Senator Grafstein: Thank you. Two contracts, both February 1, and as I understood your testimony, what you were saying is Paxport Inc.'s contract was to provide advisory services to Paxport Inc., and we'll deal with who Paxport is in a minute, for ongoing services for the Toronto airport project.
Mr. Doucet: No.
Senator Grafstein: Just bear with me. For Paxport Inc. for the - we have the International agreement now. I'm not talking about the International one. I'm talking about the one that was registered, the registered agreement to provide services to Paxport Inc. to do precisely what? Not the International one.
Mr. Doucet: As I've said in my opening remarks, to help position Paxport to eventually be involved in the full devolution program of airports across Canada.
Senator Grafstein: All right. Now, if we look at the contract itself.
Mr. Doucet: Yes.
Senator Grafstein: The words of the contract say - it's a pretty vanilla contract.
Mr. Doucet: It's a general retainer agreement.
Senator Grafstein: It doesn't say that. Your agreement doesn't say that. What your agreement provides - I'm now referring to your tab 3, and I'm reading from the agreement called GBCI Group Agreement with Paxport Inc. It doesn't say anything like that at all. What it says is the following. It says ongoing general information, advice, relevant monitoring, input into its strategic plans vis-à-vis the government factor, assistance in preparing for meetings with government officials, advocacy.
It makes no reference at all to what you're saying. It just makes a vanilla reference to Paxport Inc., which at that time was part of - and we'll come to that in a moment - the so-called successful best overall something or other. But there is no definition of what you've just said in your agreement.
Mr. Doucet: Your terms "vanilla" are your terms.
Senator Grafstein: Okay.
Mr. Doucet: They are not mine. My -
Senator Grafstein: But your agreement doesn't make any reference to what you've told us this morning.
Mr. Doucet: It does not exclude it.
Senator Grafstein: It doesn't include it necessarily.
Mr. Doucet: Those items are all part of what would have been required in the process of having a successful involvement by Paxport in the devolution process of airports across Canada.
Senator Grafstein: I take it that the key to this agreement were your special talents, your special talents. In other words, I assume that Paxport Inc. was coming to you, based on your testimony, for your special talents. They were coming to you because of your expertise, your personal expertise.
Mr. Doucet: You might want to ask them that question.
Senator Grafstein: I assume you were conveying to them, and they were acquiring from you, your special talents.
Mr. Doucet: Yes.
Senator Grafstein: By the way, I'm not questioning those talents, quite frankly. I think they are superb, and we've had an opportunity previously to work together, and I have no question, Mr. Chairman, about the witness's talents. I'm just trying to see who they were conveyed and for whom.
So it was for your special talents, because you've told us that you were the key owner in your firm and so on. Again, so it was your special talents.
Now, again I look at the agreement. This is no reference to you in this agreement, other than you as a signing officer. There is not the provision that the consultancy will require your services. You can throw anybody at them you want, excluding yourself.
Mr. Doucet: Yes. I do not - our firm never signed a contract with any client that was not firm based. That is to say, the firm only signed contracts with the clients.
Senator Grafstein: But it's clear in some provisions, not necessarily this, I'm not able to say, but normally, in a service-driven contract, and Senator Jessiman has drafted as many as I have, they normally call for the requirement that the person whose services you're seeking will then provide those services. He then enters into an agreement with the company, and the company in turn deals with the services. There is no reference to you here at all.
Mr. Doucet: That is correct.
Senator Grafstein: Okay. You've made a fact about the confidentiality between - you know, that you're coming forward to this committee, and you've had your agreements with your clients waived their confidentiality provisions. I look at this agreement. This is no reference to confidentiality here at all. There is, as a matter of fact, in the merger contract that we'll talk about in a minute, but no reference to confidentiality here at all.
Mr. Doucet: I said in my statement that I deemed all of my contracts with all of my clients to be confidential.
Senator Grafstein: But I'm just trying to listen to your statements and look at the written record.
When we turn to your term, you have in this contract a ten-year no-cut contract. Ten years, no cutting. So there is no ability of any party, aside from the normal breaches, for them to reduce this in any way, shape, or form. It's a no-cut contract. And a no-cut contract, if you added it up, would be ten years times 8,000 a month, which is $960,000. No cut. Is that correct?
Mr. Doucet: Well, the no-cut is your conclusion.
Senator Grafstein: I'm looking to the agreement.
Mr. Doucet: There is no reference in the contract to a manner of severance.
Senator Grafstein: All right. And next, this is purely a contingent contract.
Mr. Doucet: Again, the term "contingent" is yours, not mine.
Senator Grafstein: I look at the contract.
Mr. Doucet: The contract does not use the word, I don't think.
Senator Grafstein: I agree, but this contract is contingent upon one event, and the event is the commencement of the lease transfer of Terminals 1 and 2. So at a particular future moment in time, Senator Tkachuk, and the moment that's triggered in this agreement is a transfer of lease by a third party, this agreement comes into payment effect. It's a binding contract, according to counsel, and I agree with him, but then triggers on that.
So it's a no-cut contract, and it's contingent or conditional or on a condition subsequent to one event, only one event, and that is an award, a legally binding transfer of terminal - lease transfer of Terminals 1 and 2.
Now, I'm just - this is for information. I'm not trying to - if it's not, say it, but that's not what the documents say to me.
Mr. Doucet: Well, the document, I don't think you will find the word "conditional" or "contingent".
Senator Grafstein: Well, it says:
... shall be for an initial term of 10 years commencing on the date ...
I'm referring to paragraph 2. It's very simple.
... on the date of lease transfer of Terminals 1 & 2 at Pearson to Paxport from the Government ...
Mr. Doucet: My advice, senator, from counsel, is that this contract is not a contingent contract. That is not to say that our firm shies away from contingent contracts. But this particular one, since I had nothing to do with what would trigger the event to which you refer, this was the purview of others, that I am not included in the process that leads to the triggering. As far as my advice - my advisors are concerned, that would not make it a contingent contract.
Senator Grafstein: But Mr. Doucet, just to be fair -
Senator Tkachuk: For information here, when you say - I'm not a lawyer. We have got a lawyer here. What is a no-cut contract? What is a no-cut contract?
Mr. Nelligan: I never use the term myself, but I assume the witness is talking about some way of waiving or changing the terms. I don't know.
Senator Grafstein: This is no provision here -
Senator Tkachuk: Maybe could you help?
Senator Grafstein: This is no provision here for any change in the contract. It's not a contract that goes for three years with parties to mutually agree at certain times. It's ten years. It's a ten-year fixed contract. No cut, no change, no variation, no ability of any party to change it.
Senator Tkachuk: Well, just a minute here.
Senator Grafstein: For ten years.
Senator Tkachuk: I just want to ask you, because this is very important. When you use the word "no-cut" -
Senator Grafstein: I'm not acting here as a lawyer; I'm acting here as senator.
Senator Tkachuk: You are a lawyer.
Senator Grafstein: We've got our counsel here. If you've got a legal question, you ask counsel.
Senator Tkachuk: If it's no-cut, would it be stated "no-cut" in the contract, that there is no way that it can be cancelled? Because it seems to me - I mean, I was in business in Saskatchewan, in the direct marketing business. We never had cancellation provisions, but if you didn't do the job, the client didn't pay you, and then you go to court to resolve the issue.
In this case, if the client wasn't happy with the service and he quit paying, is there a penalty provision like there would be in say an NHL contract with a hockey player, or would they just go to court and the judge would decide whether there is a contract or not?
Mr. Nelligan: It depends on how full you want to make the contract. You can put in provisions for amendment at various periods. You can put in provisions for cancellation or change upon certain conditions. Or you can leave it that it speaks for itself, and, if there is a breach of the contract, then if you can't agree, you have to go to court.
Senator Tkachuk: Is there such a thing as a no-cut contract?
Mr. Nelligan: Well, as I said before -
Senator Tkachuk: It can't be cancelled?
Mr. Nelligan: The language is not mine, but there are sometimes contracts have provisions for default or for amendment. Other times they don't. Either form is acceptable. It depends upon the wishes of the parties.
Senator Tkachuk: Okay.
Senator Grafstein: Back to my point -
Senator Stewart: Can I ask counsel, having reviewed the contract, which of the two alternatives does this one fall into?
Mr. Nelligan: Well, there appears to be no provision here for amendment or cancellation within the terms specified.
Senator Stewart: Thank you.
Senator Grafstein: All right. Now, so to a disinterested observer, we have this contract without the ability to change it for ten years, and then we have your statement this morning saying that you had nothing to do with the final award of the contract to the Paxport cum merger group, but you had a real interest in that contract because this contract got triggered by that event. So when you say you had nothing to do, you had a real and definitive economic interest in the award of the final contract to Mergeco cum Paxport.
Mr. Doucet: Yes, my firm did. Those that I contracted to help me did. And I hope the client did.
Senator Grafstein: Fine. Let's just move on to the contract again, the contract itself. Sorry, I've lost my notes here for a moment.
In addition to this, there is no provision in this contract for you to assign this contract to anybody else. So this contract is with the GBCI group, and -
Mr. Doucet: GBCG.
Senator Grafstein: I'm sorry, the Government Business Consulting Group. These acronyms get me down. I have difficulty with them. I appreciate that.
But you have no ability, or your company had no ability to assign this to anybody else. So this is a personal contract to a company which you were at the time the major shareholder or the sole shareholder, and you had no ability to turn this over to a third party, by law. I'm talking about just in the agreement.
Mr. Doucet: I'm not a lawyer either.
Senator Grafstein: There is no assignment provision. Counsel, you'll see that there is no assignment provision in this unless it's somewhere not in this document.
Senator Tkachuk: If Fred died, would the contract just keep on going?
Senator Grafstein: Yeah.
Senator Tkachuk: That's great. It would be hard, but it would be -
The Chairman: Order.
Senator Tkachuk: Sorry.
Mr. Nelligan: The only suggestion I would make, senator, is that a contract with a corporation is not normally deemed to be a personal contract. It's with a corporation. Within the corporation, one can always buy and sell shares, and the personalities can change, so I would not call this a personal contract.
Senator Grafstein: No, but it's a corporate contract in the sense that it doesn't have, and Senator Jessiman will understand what I'm saying, it doesn't have the normal assignment provisions, with or without reasonable consent.
Mr. Nelligan: That's right.
Senator Grafstein: It's a locked-in contract, in that sense. The only way -
Mr. Nelligan: In that sense.
Senator Grafstein: The only way to deal with this would be through, as you say, the sale of the shares of G - excuse me again.
Mr. Doucet: GBCG.
Senator Grafstein: That.
Mr. Nelligan: Yes.
Mr. Doucet: I'm not -
Senator Grafstein: Let's continue.
Mr. Doucet: You asked me a question.
Senator Grafstein: Sure.
Mr. Doucet: I started saying I'm not a lawyer, and I can't answer your question on the assignment, but I want to say this: That as a non-lawyer, I didn't feel constrained by that contract about hiring whoever I wanted as the president of the firm at the time to conduct the work of the firm pursuant to this contract, be those people individuals or corporations.
Senator Grafstein: I'm not suggesting you did. I'm just trying to get from the document what the document says and try to, as I say, filter it through the testimony.
Now, the bonus provision. You do have another agreement with us, and that is with - what is the name of the company? This is an agreement that you've referenced. You've referenced with Construction Angkor and RL Cooksaet Canada. And again, the references in terms of the work that you do for them is identical, same general provisions.
So if we again look at the contracts as opposed to your testimony, we see a parallel in the terms of reference, written terms of reference to Construction Angkor and Coolsaet Canada, and so it will give you some indication of the difficulty we're having trying to parse through these agreements.
Now, I would like to turn to the next agreement. The next agreement is again the agreement for Paxport International, and everything I've said about Paxport Inc. applies to Paxport International with one exception. The fee structure is different. And in that instance, instead of it being 8,000 per month with disbursements and all the rest of it, it's 8,700 per month, and so the total there for the ten years would be 1,444,000. Again, it's again from the same source. So -
Senator Tkachuk: Like a Senate contract, eh. It's like a Senate contract. That's no-cut too.
Senator Grafstein: The Senate doesn't have a contract. We don't have a contract.
Senator Tkachuk: You don't have one?
Senator Grafstein: We don't have a contract.
Now, on the International agreement, again, for the uninitiated, when they read the two agreements, the terms of reference are the same. The contract terms are the same. The parties are somewhat different, but they are the same ownership, for exactly the same terms of work, and no separation in terms of what you were doing for one as opposed to the other in the contract.
I take it that the record will show that in response to each one of those comments, the witness was agreeing with me.
Mr. Doucet: Yes.
Senator Grafstein: Fine. All right.
Mr. Doucet: May I comment?
Senator Grafstein: Sure. By all means.
Mr. Doucet: I think the first page of the contract reads "general consultancy contract".
Senator Grafstein: It may. I just - which one?
Mr. Doucet: Both of them. Each one.
Senator Grafstein: It says, title page - well, except this -
Senator Hervieux-Payette: Section 3.
Senator Grafstein: Just hold on for a minute. Where is the other contract?
Mr. Doucet: Your tab 3, senator.
Senator Grafstein: I know. That I just want to see. I have the Inc. one. Does the other one follow?
Mr. Doucet: They follow, yeah.
Senator Grafstein: Immediately follow.
Mr. Doucet: About five pages into it, you have the other one.
Senator Grafstein: Now, again my confusion on that, on the general side, if you look at the covering page, the covering page says:
WHEREAS G.B. ... is offering Pax ... Government of Canada relations and related services, hereinafter called government relations ... services.
AND WHEREAS Pax .. carries on the business of Airport Development and Management.
And then when you turn to the International agreement, it says exactly the same thing. There is no reference here to your international aspect. The parties are different, but the content is the same.
Mr. Doucet: That's correct.
Senator Grafstein: How are we to deduct or how do we get support for your contention that contract two was for international services and contract one was sort of partially for the evolution for the thing, because the references are exactly the same? They're parallel. So a third party can't deduct that from the legal document.
Mr. Doucet: Yes. Let me try and explain.
Senator Grafstein: Please.
Mr. Doucet: First, these are general consultancy contracts, and they are used broadly as standard contracts. The assignments that are given pursuant to those contracts are sometimes given in writing and sometimes given orally.
In this case, the separation is made on the company's contract, Incorporated in one contract and International in the other. The actual work to be carried out, because we are dealing here with devolution from Crowns, be it the Canadian Crown or other countries, the process presumably would have been very much the same. That is to say that most airports that would have been targeted internationally for possible inclusion in the devolution there, their devolution program would have been owned by the state, and therefore the process of the work to be done would have been quite similar to that which was being done in Canada.
Senator Grafstein: I can't either agree or disagree with what you're saying. All I'm suggesting is that is not reflected - nothing that you've just said is reflected in the written documents presented by you to this committee. The written documents do not reflect what you've just said.
Mr. Doucet: They do not reflect otherwise.
Senator Grafstein: But they do reflect the fact that it's for Canadian consulting services for the airport development.
Mr. Doucet: No, they don't.
Senator Grafstein: That's what the general words say. That is right at the beginning on the cover page. Whereas. Whereas G.B. is offering Pax Inc. International Government of Canada relations and related government consulting services hereinafter called government relations consulting services, and whereas Pax Inc. carries on the business of airport development.
Mr. Doucet: But it doesn't say Canadian airport development.
Senator Grafstein: The other one says? It says the same thing.
Mr. Doucet: That's right.
Senator Grafstein: It refers to Pax and Pax as Pax's business.
Mr. Doucet: That's right.
Senator Grafstein: So there is no change in the definition. So forgive us the confusion. Forgive the external parties who don't have any knowledge of this the confusion. The documents don't seem to reflect what you're saying. That's all I'm saying. Fair enough. You agree with that.
Mr. Doucet: They are clear to me, but they may not be clear to you.
Senator Grafstein: They're not clear on the documents. Okay.
Now let's move to the confusion that I have and that Senator Jessiman and I both share. That is, who pays? You get the successful award. Who pays the cheque? Who is your client?
Mr. Doucet: Paxport Incorporated in one case and Paxport International in the second case.
Senator Grafstein: All right. On or about January 14, some weeks before you sign this agreement, and some weeks after you have your preliminary discussions with the Paxport officials, which is somewhere between December 7 and December 22, we have our first indication of a legal document that references this deal, and it's called the - it's the first pre-merger document. I'll call it a pre-merger document, because there was subsequently fuller legal documents to reflect that. That is document 002064. I would hope that somebody will give him a copy of that document.
At the same time, you might also - we'll hold that for a moment. Now, I think all the other members of the committee have that document.
Mr. Doucet: Would you give me a bit of time?
Senator Grafstein: By all means. The question I'm going to ask you is, I'm trying to find out from the documents as opposed to testimony who pays and who is your client. Who is your client?
Mr. Doucet: I don't have to read this to answer that specific question. My client was and remained Paxport International and Paxport Incorporated.
Senator Grafstein: Let me take you through some of the confusion that I have, first of all, in this document. The document says - this I was corrected the other day, and I appreciate that - that Paxport was awarded the rights to negotiate Terminal 1 and 2 for which they received 50 per cent of the Mergeco, which essentially, if you add it all up, was, I assume, something like 18 or $19 million for the contract plus the right to or the requirement to invest another $61 million, for a total of $80 million, and the other party was putting in the same amount in terms of goods, which was the cash flow and the value of Terminal 3. That's the deal.
Now, as part of this deal, Paxport is able to recoup $5 million expended by them up until the time of the trigger date, your trigger date. So they get a recoupment of some $5 million. In addition to that, Paxport, or I think it's Paxport, or somebody, gets a management - an ongoing management contract for the airport. And we don't know the terms of that. But so Paxport got from - they got their equity. They get their bonus, which is another $20 million in addition to that. They have a cut - it's not a no-cut. In this instance, it's not a no-cut management. It's a management contract that can be negotiated from time to time.
Now, when I reference your documents, who pays your cheque? Where does it come from? Who is your client? Is it the Mergeco, or is it Paxport Inc.? I'm talking about the Inc. part, not the International part for the moment. Paxport Inc. Who pays? Who is your client?
Mr. Doucet: As I've said before, senator, my client was and remained Paxport Inc. in the case of that contract, and in the case of the other one, Paxport International.
Senator Grafstein: I'd like counsel to confirm this, because I haven't had a chance to do this for a subsequent date, but my reading of this contract is that all of their rights, Paxport Inc.'s rights, for Pearson, including the management, was thrown into this deal, and they end up getting equity in the deal, plus they get their ongoing management responsibility. So where do you fit into this?
Mr. Doucet: Well, senator, as I've said before, my contracts are what they are, and you have them in front of you.
Senator Grafstein: You were concerned about this on April 6.
Mr. Doucet: I'm sorry?
Senator Grafstein: You were concerned about this on April 6.
Mr. Doucet: As to who would pay the bill?
Senator Grafstein: Yeah. And let -
Mr. Doucet: I'm always concerned about who would pay the bill.
Senator Grafstein: You were concerned in writing. I think we should now turn to this. I would like you to read this before I get after this. That's a document that is on part of the public record. It appears in the lawsuit that was launched, I believe, by the various parties, and it's Exhibit Number 7 to an affidavit of John Desmarais, and I think it's before the committee. If it's not before the committee, it should be before the committee. It's a letter dated April 6, 1994 from Mr. Doucet to Robert S. Vineberg, who I believe is the counsel and the lawyer responsible for preparing the merged documents. Is that correct?
Mr. Nelligan: That's my understanding.
Senator Grafstein: That's my understanding. If I'm not correct, counsel, correct me on that. Read this letter and tell us what this means.
Mr. Doucet: Would you give me time to -
Senator Grafstein: Sure, by all means. By the way, if you would like to seek counsel's advice on this and come back and deal with it, even at a subsequent time, I hope, because I don't want to surprise you with any document, you can come back and amplify any answer you give at this time.
Mr. Doucet: I appreciate that. Thank you for that. My first question, Mr. Chairman: Is this relevant to the committee's proceedings?
The Chairman: I haven't read it yet.
Mr. Doucet: Maybe we can get a declaration on that first.
Senator Grafstein: Let's take a minute or two to read it. It's only a page. Maybe I could read it aloud for everybody's edification. This is a letter to Mr. Vineberg from you. This is now April 6, 1994, and this is:
As requested by your letter of March 30, 1994, we are writing to provide you with the summary of the claim by our company ("GBCG") against T1T2 Limited Partnership.
And then it refers to:
GBCG entered into separate contracts ...
They referred to separate contracts.
... dated February 1, 1993, with Paxport International and Paxport Inc. ...
And I assume you're referencing the two contracts that you brought today.
Then you go on to say:
The contracts provide that they are for an initial term of ten years commencing on the date of lease transfer of Terminals 1 and 2 at Pearson International Airport, an event that occurred on October 7, 1993.
That was when the ultimate contract was signed or approved by the government, the final legal document. Sorry, the legally binding and fulsome document.
Then it goes on to say:
The contracts also provide for payment to GBCG of consecutive monthly retainers in the amounts of $8,000.00 and $8,700.00 respectively during the term of the contract together with reimbursement of expenses ... Copies of the contracts are attached.
We had this letter, but until today we did not have the contracts.
Then you go on to say:
The rights and obligations of Paxport International and Paxport Inc. pursuant to these contracts were assigned by them in 1993 to T1T2 Limited Partnership and another party. GBCG was so notified by both the assignors and the assignees and thereafter took instructions from the management of the assignees and represented their interest. In 1993, it was instructed to direct its invoices rendered pursuant to the contracts to the T1T2 Limited partnership.
Then it goes on to say:
By letter dated December 31, 1993 addressed to GBCG, Pearson Development Corp., presumably acting as the management company for the assignees, acknowledged that GBCG has undertaken work for it. By this letter, it wrongfully purported to terminate the contracts. The contracts contained no provision for their termination during the term, and accordingly they remain in full force and effect. GBCG claims against T1T2 Limited Partnership the full amount owing pursuant to the contracts over their entire term, and intends, if necessary, to sue to recover the amount owing. It is prepared to accept the present value of the amount claimed, as determined by an actuary.
And then it says something that's quite curious, and you will, I'm sure, be able to explain that:
GBCG does not intend to assert any direct claim against the Government of Canada arising from the breach as set forth above.
So my confusion is, based on your testimony, that first of all, Paxport International had nothing to do with this. This was a deal, one of, forgive my phraseology. It was a separate and distinct agreement that had to do with the consulting arrangement for things overseas, and then we have the merged company - you coming to the merged company and saying, "By the way, you can't terminate my contracts."
Forgive me if it sounds to me like the two are tied in some fashion and in some way, not yet understood. The merged company is responsible for both these two contracts, not Paxport Inc. or Paxport International.
Now, to be fair, chairman, if the witness wishes some time to have this explained by his counsel and so on, I would appreciate him doing that. If he's prepared to answer it now, he can so do so, but I want to give him every opportunity to respond, because there is a conflict in my mind between the testimony he's given today and this document, and I would like it for us to be fair to him and to the public to have an opportunity to clarify the conflict.
Mr. Nelligan: I think one of the problems, senator, is that this refers to a letter he received from the new company. They keep changing the name. In this particular case, it's T1T2 Partnership.
Senator Grafstein: I can't sort it out.
Mr. Nelligan: But what he's saying here is that, "T1T2 wrote to me and told me that they were assigning - that they were presuming the obligations under my contract with the various Paxports." We don't have those documents because the document you have in January is an earlier document, which I pointed out before.
And as I read this, and I think the difficulty here is that this might be referring to some litigation he's going to be involved in with these companies. He's saying, "I had a contract with the two Paxports. Your company has now indicated they have assumed Paxport's obligations, and another company has purported to cancel my contract, and I say they have no right to do it."
Senator Grafstein: We have other evidence here that Paxport assigned certain rights, we're not sure which, to Mergeco.
Mr. Nelligan: But this would be a matter between Paxport and Mergeco, and I don't think this witness would be aware of them other than the instructions he had from Mergeco, as it's presently called, that it had assumed the obligations.
Senator Grafstein: Again -
Mr. Nelligan: Until we would have the evidence from the Mergeco group as to what obligations they assumed, we don't know whether they assumed obligations relating only to Pearson or obligations relating to ongoing business.
Senator Grafstein: I guess what we're trying to do is sort out these relationships and figure out what is what.
Mr. Nelligan: But I don't think this witness will know, other than what he says right here.
Senator Grafstein: Well, it's his letter. Maybe he can comment or come back to us on that. I'm prepared to listen to his comment now, and then he can come back to it afterwards. It is confusing, counsel.
Mr. Nelligan: There is no doubt. I think it's confusing in the sense that the people who were doing this aren't before us yet and we haven't heard from them yet.
Senator Grafstein: Except one party is, the party that signed the letter.
Mr. Nelligan: But he's telling about what somebody else has purported to do, and he may not know. But in any event, he can explain it.
Senator Grafstein: Explain it.
Mr. Doucet: I take it from the chairman that it's relevant to this committee?
Mr. Nelligan: If you just explain the purpose of this letter and why you sent it, without going into the merits of the litigation you have with another party.
Senator Grafstein: By the way, I don't want to prejudice any litigation or any rights that you may have. That's why, if you want to seek counsel's advice on this, please do so. We're trying to get at the substance of this as it relates to the subject matter of the committee, not to interfere with any private rights.
Senator Tkachuk: What's the substance? What's the point?
Senator Grafstein: The witness has talked to us about consulting contracts related to the airport. He says -
Senator Tkachuk: No, he hasn't.
Senator Grafstein: The contracts seem to reflect that in writing. They are tabled in front of us. He's given testimony about that. He has given us an explanation of that.
Senator Tkachuk: I understand.
Senator Grafstein: Now I'm trying to understand, and he said that he has had nothing to do with this process, except the trigger of these contracts all take place on the successful award of the very contract we're talking about.
Senator Jessiman: To Paxport.
Senator Grafstein: To Paxport. So we're trying to sort it out. Who gets what when and for what reason.
Senator Tkachuk: Well, to me, I mean, the contract tells you who gets what when. I mean, we've got a private citizen here who has been good enough to come before the committee because he's a lobbyist. If he was a lawyer or an architect or any one of the other myriad of businesses, myriad of businesses, that have been involved in this whole process, they're not all here talking about their private business affairs.
I'm not here to defend Mr. Doucet. It's just the process is beginning to bother me. He's here to see - he's here as a lobbyist. We asked him to come here. Let's ask questions as to his lobbying activities on this particular contract. If we're here to dig around his private affairs, his private affairs, then maybe, you know, like, maybe you should leave. You know, maybe you should leave, because I wouldn't stay here. I wouldn't stay here.
And you know, you've got props. I brought the National Inquirer, because this is exactly what we've been doing the last hour and a half, is talking about stuff that has no relevance. And it's three o'clock in the afternoon on Thursday, and this -
Senator Hervieux-Payette: And you have a plane to catch.
Senator Tkachuk: My plane is at five o'clock. My plane is at five o'clock. It's really important that I do leave.
But my point is that he's been here since 12:30, which we've taken up - I think I took up 25 minutes of questioning, and it's been going on for two hours, and what have we learned?
Senator Hervieux-Payette: Senator Tkachuk, tell us what was discussed outside of the lobbying contract. I have not heard anything about his personal life. I haven't heard anything about other contracts. We just discussed the Pearson airport overall global contract and activity. So I don't know why you talk about private life. There is no private life.
Senator Tkachuk: Private business affairs. You know, he can go ahead. He can speak for himself.
Senator Hervieux-Payette: It's not private business affairs. It's his action with regards to this particular subject-matter.
Senator Tkachuk: He can speak for himself. All I'm saying is, if we're trying to get some information, let's get to it and let's get the information. We've been here for, on your watch, senators across, since ten minutes to one o'clock, and it's now three. And I'm just asking you what we've learned.
Senator Hervieux-Payette: We've learned that some of the things are confusing, and we're trying to clarify them. Some of them I understand more.
The Chairman: Mr. Doucet, maybe we can get back to the matter of the Pearson airport question.
Senator LeBreton: That would be nice for a change.
The Chairman: On December 7, 1992, it was announced that Paxport had submitted and had been evaluated as having the best overall acceptable report or proposal. Between December 7 and December 22, which are your dates, you made an arrangement with Paxport to provide them with services in Canada, overseas, wherever, involving advice, technology, whatever came up.
Now then, from that date, December 22, until October 7, you must have been very very concerned about the eventual contract and how it would all turn out. In that period of seven, eight months, did you do anything to assist Paxport or Mergeco or T1T2 or the managing partner Pearson Development? Did you do anything to assist in the finalization of that contract? Did you lobby anybody? Did you pay anybody? Did you do anything?
Mr. Doucet: I did not during that period, senator, lobby anyone. As far as my mandate was concerned, it was not a lobbying one. It was one looking over the horizon of post Pearson, and I've defined what that activity was on both the Inc. and the Int. contract.
I've also indicated that I kept a watching brief. I kept my ears open as to how the process was going on because I did have an interest as to its outcome, and I've disclosed that and it's obvious.
So I hope that answers your question.
The Chairman: Yes. You didn't influence anybody or try to influence anybody?
Mr. Doucet: Absolutely not.
The Chairman: During that period?
Mr. Doucet: I didn't think that anyone had to be influenced. This was a technical process that was going on. It's not unique to this particular contract. All major procurements go through a process of negotiations. During those periods, for us who are in the professional roles of lobbyists, the lobbying is over. That's for the technocrats and the bureaucrats and the clients themselves and their teams to emerge with an agreement.
The Chairman: Well, whatever confusion that senators might have with regard to the contracts or the nature of the contracts, or whatever problems may arise as a result of litigation which you may have with another party is one thing, but I just wanted to know what the lobbying activities were up to the date of October 7.
Mr. Doucet: I think, Mr. Chairman, that my colleague Mr. Neville answered it best this morning when he said that during that period, it was a very quiet period for the lobbyists so-called. Because the best overall selection had been made, the process that followed after that was one which I just explained in your previous question.
Senator Grafstein: Two short questions. So from December, the middle of December until October, middle of December, 1993 to October 7, you're telling the committee that you had no direct or indirect contact with respect to government officials of any stripe, be it elected or appointed or central bureaucrats or consultants to these, with respect to the October 7 contract? Which was the merge contract in its enforceable form.
Mr. Doucet: I'm not saying that. In fact, I disclosed before that I met with the chief of staff of the minister, and I don't recall meeting anyone else. Because I was interested in the outcome, and I was keeping a watching brief, monitoring.
Senator Grafstein: If you did not talk to anybody other than Mr. Neville and the chief of staff, how were you keeping a watching brief? Where did you get your information from?
Mr. Doucet: Senator, when you're in the business that we're in, government relations consultant, you fraternize with the network of Ottawa, and through that process, you find out what is going on. This is not a revelation, I'm sure, that I'm making to you.
Senator Grafstein: Absolutely not.
Mr. Doucet: Therefore you get acquainted with what is happening. And since -
Senator Grafstein: I mean, I don't want to qualify this as lobbying or not lobbying. That's another question. But there were discussions that you had from time to time from the middle of December to October 7 with the decision-making process with respect to this project?
Mr. Doucet: With respect to the project that are identified in my contracts that are mine to pursue.
Senator Grafstein: Fine.
Senator Stewart: The implication is that you were indifferent to whether or not the contracts to which you have made reference ever came into effect.
Mr. Doucet: No, no. I don't want to leave you with that. I certainly had an interest.
Senator Stewart: You just prayed?
Senator Grafstein: Prayed and fraternized.
Mr. Doucet: I kept my ears to the ground.
Senator Stewart: Ears and knees.
Mr. Doucet: Ears and knees on the ground.
Senator Grafstein: For purposes of the record, I should indicate my relationship with Mr. Doucet, because it was formal for a previous period of time. And that was that I was co-chairman of the economic summit in 1988, and Mr. Doucet was at that time I think consulting with the government. I think it was the Prime Minister's office. And we had a very good and a very fruitful and a very interesting and a very successful relationship. I acted in my capacity as a senator and a volunteer. He acted in his role as ambassador. So if there is any question about any other relationship I have, we did have that non-contractual non-legal but very pleasant relationship.
The Chairman: Thank you. May I thank the witness? Thank you very much, Mr. Doucet. That was very interesting testimony.
Mr. Doucet: Thank you.
The Chairman: One last thing. We meet again, as you know, on Tuesday, September 12, and the witnesses at that particular time will be the group from Claridge and the group from Paxport, for want of a better name.
Now, I want to make just a couple of announcements. I want everybody to take notice of and to thank the court reporters who have been with us up till the present time and will continue to be, the interpreters and translators, the duplicators and photocopiers and the binders, and the messengers who delivered all the daily evidence to the people who requested it, and the people who sent the stuff on the Internet to those who requested it. I want to thank them. They have done an absolutely excellent job for us, and we're very very grateful. The meeting is adjourned.
The committee adjourned.