Massive Audit Into Federal Technology Fund Remains Shrouded In Secrecy

Industry Canada hired an accounting firm, Raymond Chabot Grant Thornton, to examine the books of 47 companies receiving money from Technology Partnerships Canada, a multibillion-dollar fund to promote research and development. Accountants were asked to determine whether any of these firms gave commissions to lobbyists who may have helped secure them the cash. Industry Canada rules forbid taxpayer dollars going to middlemen as commissions or contingency fees. The department has already uncovered four cases where a lobbyist received a total of more than $2 million in forbidden commissions. Three of the offending firms were publicly traded British Columbia companies that were required by securities regulators to disclose the problems; the fourth is an as-yet unidentified privately owned company. Industry Canada hired a forensic auditor last spring to investigate the four firms, and says it has since arranged to recover the missing money, which amounted to a 15 per cent finder's fee for the lobbyist. The department has refused to disclose details, but says the funding agreements with the four have since resumed. Fearful that the practice was widespread, the department broadened its investigation to a so-called "second phase," which included a random sampling of the program's 673 approved projects. Fifty-eight projects were picked, involving 47 firms receiving $490 million from the fund. The fund has committed a total of $2.7 billion so far, so the sampling represents a hefty 18 per cent of the entire portfolio. But months later, the Raymond Chabot Grant Thornton investigation remains incomplete - and there's no word on when it will produce a report. "It is too premature to talk about preliminary findings," said fund spokesman Bruce Stuart, citing "the complexity of the process and the fact that we are dealing with a number of individual audits, all at varying stages of completion." Industry Canada has not suspended any agreements or withheld any money so far, Stuart added. More: http://www.moneysense.ca/news/shownews.jsp?content=b061911A&ns=headline_news [Proofreader's note: this article was edited for spelling and typos on June 22, 2005]

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