Posted on 03/20/2006 10:58:44 AM PST by fanfan
On a frigid afternoon in February, Paul Champagne's latest neighbourhood is an eerie study in silence. It's an exclusive community of 40 executive homes carved just recently out of the rolling hills to the east of Carp. The houses and lots are oversized but there are few mature trees and little privacy.
Mr. Champagne, the former Department of National Defence employee charged only days earlier with having orchestrated an epic invoicing fraud, responds to a knock on his door by stepping onto the porch of a heavily-mortgaged 3,100-square-foot home owned by his wife.
Mr. Champagne, in his late 40s, looks considerably lighter than during his high-flying days a couple of years ago. His demeanour is unexpectedly friendly. Or, at least, accommodating. He wants to talk, he assures us, but his criminal lawyer, Michael Edelson, has warned him not to. Mr. Champagne pats his German shepherd reassuringly. He hesitates in response to a question, then starts to chat about his job history and how he helped DND save money with its contracting. It is a clue, perhaps, that his story isn't quite as straightforward as his accusers have made it out to be. Or maybe Mr. Champagne is just putting the best face on the mess he has landed in.
He faces criminal proceedings later this month in an Ottawa court. That, he won't talk about. Or the money. But he allows that he has not been having much luck securing a fresh start. "My name isn't exactly opening doors," he says with a half-smile. After 10 minutes or so, he is getting cold. It is minus 12 degrees and Mr. Champagne is dressed only in a light sweater and black jeans. He is not wearing shoes. Unexpectedly, he extends his hand in farewell and disappears back into the house, where he is preparing his defence -- something that may include an explanation for what is alleged to be one of the largest frauds in the government's history.
- - -
After everything that had gone before -- the years of building a private-sector network of impressive range and power, Paul Champagne's change of jobs in November 2000 seemed odd.
He was an independent procurement expert, a fixer with a wealth of contacts inside the military establishment. Now he was proposing to take a salary cut and become a DND bureaucrat. People usually moved the other way.
Mr. Champagne had been providing procurement advice to DND as a free agent since the early 1990s, linking the military brass to computer hardware and services. He had been under contract since April 1996 to Valcom, an engineering services company with 450 employees in Ottawa and well-established ties with DND. In fact, Mr. Champagne was one of Valcom's more productive contractors.
Jean Thivierge, the company's managing director, had kept tabs on how Mr. Champagne was working out. "Brilliantly," was usually the reply he heard from his DND clients. Mr. Champagne, a ruddy-faced character with the build of a former football player, knew his way around the system. If a DND program manager required networking gear or the skills to link computer systems together, Mr. Champagne could lay his hands on them quickly, at prices that DND liked. Mr. Champagne enjoyed the wheeling and dealing and solving problems.
The only thing that didn't seem quite right about Mr. Champagne was his incredible personal wealth. Valcom's managers had heard about his palatial home near Dunrobin, and there were whispers about a spectacular vacation property in Turks and Caicos. There was another oddity: Mr. Champagne didn't seem to care if he got paid or not. Valcom's accountants had noticed he was the only subcontractor during a three-month period who hadn't submitted monthly invoices for his services. When queried, Mr. Champagne explained that he had made a substantial amount of money investing in tech stocks. He apologized for neglecting his personal invoices.
The notion that a military subcontractor earning roughly $80,000 annually had compiled a fortune by investing in the stock market couldn't easily be dismissed in the fall of 2000. Share prices at Nortel Networks, JDS Uniphase and Newbridge Networks exploded during the boom, creating hundreds of millionaires. Furthermore, the three tech giants employed more than 30,000 in the Ottawa area. Everyone in town knew someone lucky enough or clever enough to have cashed in.
When Mr. Champagne told Valcom managers in October 2000 that he would be leaving the following month for a new job at DND, they didn't think it all that strange he was willing to take a salary cut. The guy didn't need the money. But they did wonder why he wanted to become a civil servant.
- - -
They had every reason to be puzzled. Mr. Champagne had worked at some of Ottawa's most entrepreneurial companies after graduating from St. Pius X, the Catholic high school in the west end. At Mitel, he had been dazzled by the risk-taking and showmanship of company co-founders Michael Cowpland and Terence Matthews. Later in his career, Mr. Champagne was deeply impressed by the cool nerve of Danny Osadca, the CEO of DY 4 Systems. Mr. Champagne showed some entrepreneurial flair of his own when he established a consulting operation in the early 1990s. But recent court documents suggest he applied his skills in an entirely different direction.
Even as Mr. Champagne was faithfully performing his procurement services under contract to Valcom, he was also orchestrating one of the most brazen frauds ever concocted in Ottawa, according to several statements of claim filed over the past few months by Hewlett-Packard, the computer-maker at the centre of the scheme. HP says it was duped by Mr. Champagne into billing DND for $146 million worth of computer gear and services that were never supplied. It also claims the bulk of the money -- nearly $106 million -- was diverted into personal accounts controlled by Mr. Champagne.
The Royal Canadian Mounted Police recently charged Mr. Champagne and two business colleagues, Peter Mellon and Cholo Manso, with fraud and making false statements. Mr. Champagne was also charged with money laundering.
~snip~
Much, much more at the link.
Perhaps our soldiers would have better housing and equipment if millions of dollars had not been stolen.
Housing yes, equipment, I do not believe 146M would supply much in equipment.
Hell I've been in enough PMQ's at CFB Esquimalt and CFB Comox to know they need new housing. Those old shiplathe houses need to be demolished.
I think we should be prepared to see fraud and filth like this pour forth for years to come. The amount of graft, corruption and outright criminal activity (theft) during the Liberal years SHOULD wake this country up.!! But will it????
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