The Gomery Report: More Food for Cynicism

Last week, the news was almost consumed with the fallout from the first report of the Gomery Commission on the sponsorship scandal. 

I have read most of the report.  It is depressing. 

I have also read the summary of the MFP inquiry in Toronto.  Madam Justice Bellamy writes it like a mystery novel.  Of course, the MFP scandal is a story of intrigue, and Justice Bellamy makes it entertaining reading.

Public inquiries are very expensive endeavors.  They are fact-finding missions.  They cannot impose civil or criminal liability.  They cannot punish the wrongdoers.

These two inquiries have shown that it is necessary to have significant controls and oversight in government to prevent abuse by people who have the authority or opportunity to abuse the system.  It seems that whenever there is the opportunity, there is someone who is willing to supplement their income by questionable means.

In the MFP inquiry, Justice Bellamy wrote:  “In the end there are two questions:  is there enough credible evidence to conclude that Dash Domi gave Tom Jakobek a payoff?  Yes, there is.  Has either of them provided any believable evidence to contradict that conclusion?  No, they have not.”   Pretty damning words.

In the Gomery inquiry, Mr. Justice Gomery wrote: 

“Following Mr. Guité’s retirement in 1999, he incorporated Oro
Communications. Revenues from consulting fees for fiscal years ending
July 31, 2000, 2001 and 2002 totalled $1,039,431. It raises the
question of how a former mid-level public servant could command such
substantial fees—roughly three times his departing salary.

The only plausible explanation for the amount of the payments,
which greatly exceeded any rational evaluation of the time and services
rendered, is the contracts that [one of Guite’s clients] received from [Guite’s department] prior to Mr. Guité’s retirement.”

It appears that we need some very severe laws to address corruption.  Of course, severe laws mean nothing unless the courts are willing to impose severe penalties.  In my opinion, this kind of corruption – so-called “white-collar crime” – has not been penalized sufficiently to deter people from doing it.

For example, consider the insider trading case of Andrew Rankin.  He was convicted of tipping off his friend Daniel Duic, who made $4.5 million.  Duic made a deal with the Ontario Securities Commission, whereby Duic paid a fine of $1.9 million and agreed to testify against Rankin.

Gimme a break.  He gets to keep 2.6 million???  This guy should have been prosecuted too!  A deal should involve a fine equal to more than the profits that he made.  Otherwise, how can this activity be deterred?  I’ll bet a lot of people won’t turn down such an opportunity if they know that getting caught would mean they only have to pay 40% of it back. 

Can you imagine what would happen in the U.S. of A.? 

Gomery, Rankin, MFP:  they can’t help but make us cynical.  Until we make the penalties for white-collar crime and corruption severe enough to deter people from doing it, it will continue unabated.