GLEN ALLEN November 23 1992



GLEN ALLEN November 23 1992




The 42-year-old Canadian diplomat made no attempt to hide his disappointment with the organizational skills of his peers. “The department, in one crude phrase, is in a mess,” Lester B. Pearson, then the second-in-command of the Canadian High Commission in London, told his superior, Vincent Massey, after a visit to Ottawa in 1939. “Instead of the best, this must be almost the worst departmental organization.” In the decades since Pearson delivered that scathing assessment, the elite corps of diplomats, analysts and trade officers at External Affairs has managed many diplomatic triumphs, while never quite dispelling the department’s reputation for weak administration. In several reports over the past five years, the federal auditor general has criticized poor accounting procedures within the department. And this week, a 30-year career public servant will appear in court in Ottawa on fraud charges—the latest in a series of recent allegations that have dealt a serious blow to the image of Canada’s diplomatic corps and demoralized thousands of External employees at home and abroad.

So far, investigations by External’s own auditors and the Royal Canadian Mounted Police have uncovered abuses of public funds by at least 275 External Affairs employees—roughly one in every 14 staff members. As a result, senior departmental officials have handed out a total of 1,332 days of suspensions without pay and fines totalling $4,750. They have also fired three employees in the last year, the most recent dismissal occurring last month after the RCMP charged Garnet Richens, an Ottawabased trade development officer, with fraud over $1,000. Richens, whose hearing was adjourned late last week, is expected to enter a plea in the case this week. RCMP spokesmen say that they expect to lay more criminal charges in late November or early December, and more firings will likely follow. Said a senior External official last week: “Anybody who is charged and found guilty will almost certainly be dismissed.”

The first intimations of scandal came in 1988, when two sharp-eyed clerks in External’s modem brown headquarters in Ottawa— the Lester B. Pearson Building—noted an irregularity in airline expenditures. An official in the Canadian Embassy in Paris, they discovered, had filed expense claims for the cost of unused airline tickets. “Once that happened, we realized that this was likely to be more widespread,” an External official recalled last week. “Once we started pulling on the string,

the sweater started to unravel.” The personnel and corporate management branches of External Affairs then launched a sweeping investigation into airline ticket claims by departmental staff.

The major thrust of the inquiry since then has concerned bogus travel claims by officials who falsely reported the cost of airline tickets for trips home to Canada. Under their collective agreement, External employees who belong to the Professional Association of Foreign Service Officers (PAFSO) and who serve in specified areas of the world—including Eastern Europe, Africa, Latin America and Asia— can claim the cost of one trip home a year for themselves and their families. In other cases, staff members can return home less frequently. The problem arose when some employees, entitled to reimbursement for full-fare economy round-trip tickets to Canada, purchased those tickets but then exchanged them for cheaper excursion-fare tickets. Later, they submitted claims for the full economy fare, which in many cases was more than $1,000 more than the discount fare.

The foreign travel audit has been anything but cursory. In their investigation, External’s own auditors examined a total of 53,000 tickets and reimbursement claims by department employees dating back to 1985. Of those, about 23,000 raised suspicions. Copies of the tickets were sent to more than 100 airlines for verification. In the end, the auditors decided that 465 tickets purchased by 264 employees were claimed illegitimately as expenses. The sanctions imposed by the department ranged from oral reprimands to 30-day suspensions without pay, as well as fines and orders to repay the difference between the cost of discounted and full-fare tickets.

In addition to false expense claims, the

department’s investigation turned up evidence of further illicit activities by about a dozen employees. Maclean ’s has learned that in one of those cases, an External official based in Ottawa filed travel expenses in the name of several fictitious department employees, collecting thousands of dollars in false expenses.

Neither the department nor police will provide information on such individuals until the inquiry is complete and Ontario’s Crown attorney has decided whether to lay charges. But an

Oct. 14 memo from Bill Clarke, External’s assistant deputy minister for personnel, said that “several” employees are now under investigation by the department’s internal disciplinary committee for such offences as falsification of exchange-rate receipts, failure to report salary overpayments, contravention of conflict-of-interest guidelines, “visa fraud” and “harassment.” The memo added that some diplomats are out of touch with current economic realities and “must become much

more sensitive to tne environment of restraint within Canada.”

The drive to improve financial accountability has clearly sent shock waves far beyond Canada’s borders. “I think some of this is a bad rap,” said a consular official in a Third World embassy, stressing that the revelations underscore the need for better management rules and more stringent accounting procedures within the department. He added, “It’s a matter of concern because it involves the reputation of everyone who works for External.”

As well as imposing fines and suspensions, External’s senior officials say that they have recovered nearly $450,000 from department staff who filed false claims for travel expenses. But some observers insist that stiffer penalties are in order. Declared Donald Boudria, the Liberal critic for government operations: “If someone walks in and steals $1,000 out of the till of the parliamentary cafeteria, do you think he would get off with a suspension?” Boudria also complains that the investigation has taken longer than necessary—although he acknowledges that “there are many people involved and they are spread out over a vast territory.”

In fact, two officers from RCMP headquarters in Ottawa have been assigned to the case since External called in the police in 1988. According to RCMP Inspector Gérard Boucher, those officers have spent much of their time travelling to diplomatic missions as far away as Africa. Said Boucher: “They were not all that well received in some of these places.”

The allegations of fraud and misuse of public funds

have come as a further blow to a department already suffering from low staff morale. Since Prime Minister Brian Mulroney’s Conservatives took power in 1984, the department’s workforce has been cut by 806 employees, to the current level of 3,711. (In its 108 foreign missions, External employs another 4,889 support staff who are citizens of host countries.) A 1990 study by PAFSO declared that “motivation has plunged and morale is abysmal,” adding that, “the department is under siege from the outside and consumed by ferment from within.”

Since that study, the malaise has deepened as a result of a break with the long-standing tradition of ministerial responsibility in the socalled Mashat Affair. Three weeks after Barbara McDougall took over the portfolio from Joe Clark in April, 1991, the federal government granted speedy entry into Canada to a former top-ranking Iraqi diplomat, Mohamed al-Mashat, whose most recent posting had been as Saddam Hussein’s envoy in Washington. McDougall later said that Mashat’s arrival was the result of “a whole series of errors of judgment”—and pointedly blamed two senior officials, Raymond Chrétien, now Canada’s ambassador to Belgium, and David Daubney, Clark’s former chief of staff. Says Fen Hampson, a Carleton University professor of international affairs: “Morale is always low in that department, but since Al-Mashat it has sunk even lower.”

For his part, John Kirton, a University of Toronto political scientist who specializes in foreign policy, says that many foreign service officers who were already “used to working 11-hour days” saw their resources and the department’s staff size dwindle during the 1980s as the workload increased. According to Kirton, many of them “became mad and cranky, and saw themselves as rejected.” He added, “They did not have the resources to do

the job they thought they should have, so they began to push the margins.”

But such reasons provide no excuse for the reported abuses, says the Liberals' Boudria. “I’m a lot more worried about what happens to morale when people who do wrong go unpunished,” the MP adds. “The innocent end up

being tarnished here. But the vast majority of External employees, I suspect, are very honest people.” Moreover, Boudria says that there are larger issues at stake in the current investigation. “If you can’t trust someone with an airline ticket,” he asks, “how can you trust

him to represent our country abroad? This is the fundamental question.”

Others, however, see the ongoing investigations as clear evidence that the department is bent on cleaning its own house after years of abuse and sloppy accounting. Said McDougall recently: “We have a good department, and I stand by them. If there are problems, then they will be dealt with in the appropriate way.” Kirton, meanwhile, credits both the minister and her new undersecretary, Reid Morden, for-^ mer director of the Canadian Security Intelligence Service, with restoring order to External. Not only does the investigation “reassure the taxpayer,” he says, but it reminds the department of the standards it honored in earlier times.

Certainly, External’s own senior officials agree that nothing justifies fraud among the department’s employees. Said one External official: “We are committed to zero tolerance—anything else is absolutely, totally unacceptable.” As Garrett Lambert, External’s assistant deputy minister of corporate management, stated in an g Oct. 14 message to all Canadian mis5 sions overseas, the department’s aim is ^ “to put behind us all aspects of this g unfortunate episode.” In an interview, I Lambert stressed that it was External £ itself that is leading the offensive " against in-house double-dealing. Said Lambert: “This investigation is the result of our own audits—and this is the end of the story, not the beginning.” Canadian taxpayers will undoubtedly want to hold the high-flying department to that promise.