ArriveScam contractor became a public servant — did not breach conflict of interest rules, says DND

Dalian Enterprises received $7.9 million for its work on the ArriveCan application as of last March. In September, David Yeo, its CEO and founder, became a Department of National Defence employee.

ArriveScam contractor became a public servant — did not breach conflict of interest rules, says DND
Jeff Whyte -
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According to the Department of National Defence (DND), military personnel and public servants can obtain federal contracts without fear of reprisal — should they avoid breaching conflict-of-interest rules.

One such contract includes DND employee David Yeo, CEO and founder of ArriveCan sweetheart Dalian Enterprises.

A scathing Auditor General report into lucrative consultant contracts revealed the firm received $7.9 million for its work on the ArriveCan application as of last March.

As the former procurement minister, Treasury Board president Anita Anand claimed no recollection of Yeo being a federal public servant while she oversaw the portfolio.

“There is certainly a rule that would prevent a conflict of interest of that sort,” Anand told reporters. “And I was extremely surprised to hear that this individual was an employee of the Government of Canada.”

Dalian confirmed that Yeo only became a public servant last September, long after the completion of the ArriveCan application, reported La Presse. He did not receive payment from the government as an employee and contractor.

He made the appropriate conflict-of-interest filing, resigned as a director and officer of Dalian and put his company shares in a blind trust, according to a company spokesperson. 

The Ottawa Citizen learned government employees can receive consultant contracts as long as the proper rules are followed. 

“There is no prohibition against contracting for services with current and former employees at any level, and current and former CAF members at any rank,” National Defence spokesperson Frédérica Dupuis confirmed.

In an emailed statement to the publication, Dupuis said these contracts must “be conducted honestly and prudently to withstand public scrutiny.” She could not estimate how many of these contracts the department approved by the time of writing.

To avoid a potential conflict, Dupuis said public servants should not give the impression of preferential treatment to prospective contractors.

Although Dalian confirmed Yeo had not participated in any work with the company while employed by the DND, the department decided to suspend him, pending the results of an internal investigation. 

All contracts with Dalian have also been suspended until further notice, according to Anand.

Dalian has received $149.5 million in government contracts since 2008, according to public accounts data.

They received multiple DND contracts, valued at more than $3 million, excluding those provided by the Canada Border Services Agency, the RCMP and other departments, reported CTV News.

A subsequent CBC News Analysis of an order paper question by Conservative MP Dan Muys pegged the value of their contracts at over $200 million since November 2015.

Auditor General Karen Hogan told the Commons Public Accounts Committee that public servant disclosures are vital to make, should they have other employment income coming their way.

Hogan recently told MPs on the committee is essential to assess if work external to the department is incompatible with the person’s job.

Dupuis said it is the employee’s responsibility to disclose any situation that might pose a conflict of interest. “The risk of Conflict of Interest must be given serious consideration before contract award,” she said.

Asked about the ArriveCan scandal on Wednesday, Prime Minister Justin Trudeau said Canadians should expect their politicians and public servants to be "responsible and efficient stewards of taxpayer dollars."

"This is an unacceptable situation," he said. "There needs to be significant changes to the procurement process that's ongoing within the government."

"That's why there are ongoing investigations and that's why we will be making changes."

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