Quiet it may be elsewhere, so I wonder if this HP alleged involvement in a major Canadian government scam is making news outside of Canada... ======================================================================== Multi-million dollar fraud ring may have penetrated government, industry Stephen Thorne Canadian Press Friday, March 12, 2004 OTTAWA -- Officials suspect a multi-million dollar fraud ring may have been operating for up to 10 years in at least two federal departments - National Defence and Public Works - and possibly elsewhere, a key source told The Canadian Press on Friday. So far, only one federal employee, civilian director Paul Champagne, has been fired after auditors discovered National Defence had paid $160 million for military computer hardware and support services it never received. Federal audits continue and an RCMP investigation is underway. The principal company involved, Hewlett Packard, has said that Steve Bailey, a sales representative who worked with Champagne, is no longer with them. But a highly placed government source said others are believed to have been involved in what Public Works Minister Stephen Owen described as a ''very sophisticated criminal scheme'' that wracked up $160 million in phoney billings. ''We don't know how extensive, but I would be very surprised if the RCMP investigation and the audit didn't uncover more involvement than simply one or two people,'' said the source, who spoke on condition of anonymity. There is no suggestion at this point, however, that any of the six companies subcontracted to do the work were considered ''Liberal- friendly,'' said the official. Federal ministers say HP chose the subcontractors at its own discretion. HP says the government instructed it to use specific subcontractors for unspecified work. The firm said Defence repeatedly refused to provide it with particulars about the subcontracted work on security grounds. Champagne has reportedly since left the country, while the federal government has told HP to account for the services or pay the money back by March 22. Ottawa has already withheld $50 million in payments to the computer giant. Owen has said the scheme aimed to defraud both the government and HP. And Defence Minister David Pratt has said there was a ''very deliberate and well-crafted strategy to hide irregularities from audit teams at both Defence and Public Works. In the Commons on Friday, Opposition MPs wondered how so much money could go out the door without the relevant ministers' knowledge. Tory Cheryl Gallant noted the Financial Administration Act limits the signing authority for public servants to $250,000. Anything over that must go to Public Works. ''How could one person have signing authority for $160 million?'' she asked. Owen said Champagne had no authority to sign any contracts. Owen said the scheme involved a series of small contracts. ''There may be further disciplinary action forthcoming,'' he told the Commons. Champagne is said to have been living in a mansion with a gym, indoor pool and tennis courts ''on Billionaires' Row.'' ''Did anyone think to ask him how he could afford all that on a director's salary?'' asked Conservative Jay Hill. ''Why did no one take the time to investigate whether Paul Champagne had won a lottery or made a killing on the stock market, as he claimed?'' Pratt said improvements have already been made to the contract management process and he urged opponents to wait for the outcome of the investigations. ''We can't jump to any conclusions. Let's let the process work.'' * To join/leave the list, search archives, change list settings, * * etc., please visit http://raven.utc.edu/archives/hp3000-l.html *