Meet Bob Heart. He is an outstanding employee who works hard to get the job done. He stays late and comes in early. He even foregoes holidays and has turned down promotional opportunities because he loves what he does. The work he does is complicated, and not just anybody can jump in and assume his duties without messing everything up.
Despite his idiosyncrasies, managers are grateful to have him on their team and happy to overlook rumours of administrative shortcuts or the occasional hint of alcohol on his breath which could indicate a possible substance abuse problem. Because managers trust Bob entirely, a few years ago, they gave him added responsibilities when the department’s budget was cut. Bob took it all in stride when his boss’ position was cut and he ended up with the approval authority for his sector as well as for a few others including acquisitions and procurement contracts.
Bob was in a non-management position at the time he committed the embezzlement fraud. He misappropriated funds valued at $350,000 and was motivated by greed and a sense of entitlement.
He acted alone. He did not involve any other member of the organization or any outside person in his fraudulent conduct. His fraud was detected by a colleague a year after he initiated it. His employer reported his actions to the police, who laid charges after a lengthy investigation; a quarter of the embezzled funds were recovered.
Although this story is fictional, the scenario represents the typical fraudulent embezzler.
It could happen in your department
Welcome to the world of the RCMP National Division’s Sensitive and International Investigations (SII). Created in 2013 and located in Ottawa, SII’s mandate is to maintain the integrity of federal programs and institutions, as well as Canada’s reputation internationally. In short, SII is expected to safeguard Canada’s social, economic and political systems against criminal activity from internal and external origins.
Although a portion of its duties involves foreign kidnappings, war crimes, torture of Canadian nationals as well as the bribery of foreign officials by Canadian companies, it is its work in domestic files that should be of interest to the Canadian Government Executive Magazine reader.
While its investigations into expense claims of high-profile members of the Senate tend to draw extensive media scrutiny, it is the Bob Hearts of the public sector which remain the mainstay of SII’s existence.
The federal public sector is comprised 127 core public administration departments and separate agencies, for a total of 257,034 employees. With this much staff, the question is not if malfeasance will occur, but when.
The chances of wrongdoing occurring in your respective area are fair. Should wrong-doing occur in your area, it may not be viewed as a shortcoming on abilities; however, how you deal with the situation can – and does – reflect on your management and leadership skills.
After the fact, you may be asked: “What did you know?”, “When did you know about it?” and “What did you do about it?”.
If not dealt with appropriately, the perceived mishandling becomes the issue as opposed to the wrongdoing. Worse still, if the matter is swept under the rug, the seeds of corruption are sowed. Ultimately, the offender might be transferred or dismissed, but nothing prevents that person from going to work for another federal department, at which point the criminality magnifies and becomes someone else’s problem.
What constitutes criminality?
Doing nothing is rarely a good option.
This is where knowing Treasury Board policy, your agency’s or department’s comes in handy. Serious cases of wrongdoing involving a nexus of criminality must be reported to the police as prescribed by Treasury Board policy.
Simple cases of theft fall under the purview of the police of local jurisdiction whereas cases involving fraud and corruption must be reported to the RCMP. How do managers know what constitutes a nexus of criminality? It can safely be said that rumours, personality conflicts, unpopularity/arrogance and speculations are not criminal conduct.
Similarly, bad decisions, bad judgement, human error, civil disputes and breach of contract are not criminal in nature. Neither is a conscious decision to break an administrative policy or a regulatory guideline.
While knowingly breaking the rules may serve as an indication of “mens rea”, or guilty mind, the line into criminality is not crossed until there is a willful act of deception. If a fraudster will usually commit fraud for personal or corporate gain, the fact that the he or she has knowingly and deceitfully placed an entity’s financial interest at risk suffices to qualify as a criminal act.
Recurring themes encountered by police in the workplace in which the offence is said to have occurred include inadequate audits, reviews and internal controls. Poor ethics, low morale, lack of records and orientation training, ambiguity of roles and responsibilities and no enforcement against wrongdoing are also noted.
The most important factor, however, is the corporate culture. The tone from the top permeates throughout the organization. The opportunity and rationale used to commit an offence is influenced by the values and ethics adopted by those in authority at the highest level. This is a situation where perception becomes reality.
Criminal investigation and internal administrative investigations
As events unfold, a manager’s first step is to reach out to his or her department’s human resources and security offices who may choose to review the matter. Should the department’s authorities decide to proceed with a “complaint” to the police, it is important to adhere to the following steps to ensure a timely and effective police investigation. A clear letter of complaint establishes the relationship with the police.
Common law authority opens the way for the department to provide cooperation in the form of an internal review report complete with a summary of the incident, reasons for suspicions, and copies of source documents. Upon request, the police will expect original documents and access to employees, witnesses and auditors.
The continuity of electronic and original documents should be safeguarded to ensure the courts have the best evidence possible at their disposal. It is important to note that nothing precludes the internal administrative investigation from proceeding once the complaint to police has been made; however, the internal administrative investigation and criminal investigation must remain separate and distinct in order to avoid an abuse of process in the eyes of the court. Stated simply, regulatory powers available to an internal administrative investigation cannot be used to advance a criminal investigation and vice versa.
Proving breach of trust
A close second to fraud and embezzlement cases is the leak of proprietary information. A number of departments have experienced leaks of information over the years. Leaks turned into a deluge during the recent federal election.
The common perception is that those responsible for the leak of classified information can be charged under the Security of Information Act. That portion of the law was struck down by the courts as being unconstitutional.
The Act only protects special operation information which is mostly associated to the Department of National Defence, the RCMP or the Canadian Security Intelligence Service, who hold the most operationally sensitive government information. The unauthorized disclosure of such information would cause obvious damage to the Government of Canada.
This leaves criminal breach of trust as the go-to Criminal Code offence in cases of information leaks.
To prove a breach of trust, the following elements are required: the suspect is or was a public official; was acting in an official capacity; breached the standard of responsibility expected; his or her conduct was a marked departure from the norm; and, he or she acted contrary to the public good.
In addition to this, Crown prosecutors are hesitant to proceed with cases unless they are able to demonstrate a personal and tangible benefit.
Who should you call when in doubt?
This last element is challenging for police to prove. Very few cases of leaked information are prosecuted. The threat of leaked information is an area where an ounce of prevention is worth a pound of cure.
Limiting and controlling classified documents and information in accordance to security policies and procedures is the manager’s first, and in some cases, the only line of defense.
Who do you call when in doubt? Department Security Officers are welcome to contact the RCMP’s Sensitive and International Investigations at 613-993-6448 to discuss matters without prejudice and in an informal manner. These discussions often serve to clarify a way forward and manage expectations.
Supt. Denis Desnoyers is head of the RCMP’s Sensitive and International Investigations (SII) unit in Ottawa.