CONTRACTING OUT I.T. IS A BOONDOOGLE

Former public servant linked to ArriveCan questioned by MPs about government contracts

Story by Darren Major • 

David Yeo, the founder and president of Dalian Enterprises, appears before a parliamentary committee on Tuesday, March 19, 2024.© ParlVu

MPs grilled the head of an IT firm over his employment with the Department of National Defence (DND) during a House committee meeting on Tuesday.

David Yeo, founder and president of Dalian Enterprises — which was involved in the development of the federal government's controversial ArriveCan app — has been facing scrutiny since it was reported that he was a DND employee while his company held contracts with the federal government.

Dalian told CBC News earlier this month that Yeo had been hired by DND only this past September and that he took steps to address any conflict of interest concerns by agreeing to have no involvement with Dalian's DND projects and putting the company into a "blind trust."

Yeo repeated those assertions to MPs on the public accounts committee on Tuesday, saying that he had been "hands off" with the company when he became a DND employee. The government suspended Yeo's employment and he said he has since resigned from the department.

But MPs questioned how distant he was from the company while he was working for DND.

Bloc Québécois MP Nathalie Sinclair-Desgagné pointed out that his signature appeared on government contracts that were signed after he was hired by DND. Yeo said he had "a signature available" for staff to use on contracts.

"I provided my signature to the staff so if there was something going on, that I would not even be aware of it," he said.

Dalian was one of the contractors that worked on the ArriveCan app. Yeo appeared before the government operations committee in October to discuss ArriveCan, but presented himself as Dalian's founder and president. He didn't tell MPs on that committee that he had been hired by DND.

"I am an executive on the board of directors for Dalian, and I maintain all of the governance as it relates to the [procurement strategy for Indigenous business] and make sure that the company is absolutely in line, in step, with everything that relates to procurement and government contracting within the federal government," he told the committee in October.

Conservative MP Larry Brock asked Yeo during Tuesday's committee hearing why he didn't disclose that he had been hired by DND during his October testimony.

Yeo replied that he had been invited to that committee as a Dalian representative and that his testimony had "zero to do with DND."

Conservative MP Garnett Genuis later asked if Yeo was still on Dalian's board of directors when he was before the committee in October.

"At that time, there was no divestiture because we were working on it," Yeo replied.

"We were in flux during that time period."

Later, under questioning from Conservative MP John Nater, Yeo said was having meetings with his lawyers about putting his Dalian shares in a blind trust as late as January. He said that in hindsight, he wished he had started the process earlier.

"I should have done all of that prior to even looking at the offer [of employment] from the government," he said.

"That one's on me, but at the end of the day, all of the information got where it needed to go."
Yeo disputes auditor general's numbers

Yeo also said he disagreed with Auditor General Karen Hogan's recent report, which states Dalian received $7.9 million for its work on ArriveCan. He suggested that Dalian received $4.9 million for the project.

GC Strategies, the main ArriveCan contractor, also has questioned Hogan's report.

Kristian Firth, a partner with GC Strategies, told a House committee last week that the government's poor bookkeeping led Hogan's report to include an inflated estimate of the amount his company received for the project.

Hogan noted in her report that the final cost of ArriveCan was "impossible to determine" due to poor financial record-keeping at the Canada Border Services Agency (CBSA).

When asked by CBC News, Hogan's office stood by its $7.9 million estimate of the amount Dalian received for ArriveCan.

"As stated in our report, given the deficiencies in the CBSA's financial records, our auditors prepared an estimate using the CBSA's financial system, contractual documents, and other evidence," a spokesperson said.

"Based on this estimate, the cost associated with Dalian Enterprises Inc. was $7.9 million."