Angry in the Great White North

From the National Post:

Industry Canada has ordered a massive audit into $490 million in handouts to dozens of technology firms to determine whether any tax dollars were misused.

The investigation into the 58 projects got under way last August, just before the Gomery commission began public hearings — but unlike Gomery, the audit remains shrouded in secrecy.

A total of 47 companies are being investigated, and they've already hit paydirt:

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.

Apparently the money has been recovered, and funding agreements for the four firms have resumed.

Resumed?

The department has refused to disclose details, but says the funding agreements with the four have since resumed.

Let by gones be by gones, I suppose. But then we don't know who the firms were, what projects were involved, and where the $2 million, if we can trust that figure, went to, who handled it, and did any of it end up as kickbacks.

My opinion is simple: unless there is a pressing national security issue at stake, the department has no business refusing to disclose details.

So what fund is being investigated here? One of those corporate welfare thingies:

Technology Partnerships Canada has been dogged by controversy since its founding in 1996 to promote innovation in aerospace, automotive, defence and high-tech companies.

The government has contended that the seed money it provides to technology projects will be paid back — up to twice over, in some cases — in the form of royalties based on commercial success.

But as of January, only $95-million of the $2-billion paid out since the fund opened shop has been returned. Critics have charged that the program is nothing but a giant subsidy fund for Liberal-favoured corporations, such as Bombardier and Pratt and Whitney Canada.

I'm starting to get annoyed at Liberal-favoured corporations getting plum contracts.

Good thing we've got the firm of Raymond Chabot Grant Thornton hired by the government to audit Industry Canada and the Technology Partnerships fund. Now we'll get to the bottom of it. Raymond Chabot Grant Thornton knows a thing or two about governments and money. For instance, it knows that when you make donations, it's best to give to the winners, and not the losers. Since 1998, Raymond Chabot Grant Thornton (and Grant Thornton, the associate company) has donated $112,056.52 to the Liberal Party, and $19,462.25 to the Progressive Conservatives, and $32,358.90. That comes out to 68% to the Liberal Party, and 32% to everyone else.

In 2003, the donations are skewed even further: $33,655.15 to the Liberals, $4,772.48 to the Progressive Conservatives, and $4,000 to Reform. That's 77% to the Liberals, and 23% to everyone else.

Grant Thornton also donated $11,000 to Paul Martin's leadership campaign in 2003.

Does that mean that Raymond Chabot Grant Thornton can't do a good job? Maybe, maybe not. But here is something else interesting: one of their specialties is technology companies in the start-up stage and those that are exanding:

Our experts can help you along every step of the way, from the search for financing to project marketing. Their invaluable advice will help you to avoid the many pitfalls along the road and allow you to stay on course.

Finance

• Cash management


• Search for financing/government assistance


• Search for financial and strategic partners


• Preparation of financing applications


• Negotiation of financing terms and conditions


• Transaction support

They help with the "search for financing/government assistance" and the "preparation of financing applications". Did Raymond Chabot Grant Thornton help any firms get money from Technology Partnerships Canada? Did they receive fees from these companies, fees that would have come in part from the fund? Are they auditing contracts that they actually worked on?

Could they themselves need to return money, or be subject to litigation from companies that are being forced to return money?

Since Industry Canada isn't talking, we can't get answers to these questions.

[Update: This isn't the only time Grant Thornton has been the subject of questions.]