The Duffy Show–Budget Motivations


The Senator Mike Duffy trial continues, exposing more of the compost heap.  For those not fully apprised of the contents of the testimony so far, here’s a reasonable recap

If you’re too lazy this Saturday morning to click a link, this is the short form:  Duffy as a Senator gets a budget to about $150,000 a year for the office and research.  Like all Parliamentary budgets, it’s on the basis of use it or lose it, meaning come March 31 any money left gets pulled and you start April 1 with a new pile of money for the office and research.  So if you’ve had a lazy year and spent most of it making puppies, there is this budget number that seems to demand you spend it. 

In the simplest of fiddles, you order a bunch of stuff and make sure the invoices all say March 31.  The budget used up, everyone goes on their merry way and some buddies get cash for oh, communications consulting? 

Having been on the vendor side more than a few times, we used to call it March Madness.  There were stories about companies that would ship boxes of phone books or bare chassis computers to the client that would arrive, be received and the appropriate weight duly entered into the books.  Since it was on the government shipping dock by March 31, it was deemed delivered, the invoice duly paid and as long as nobody looked to hard, life went on.  Speechwriting and research contracts?  As long as someone in the office said they got the document, the invoice was paid.  Long after March 31 would some kind of actual item truly arrive, but as long as there was something in their hands by March 31, the appropriate dollars were allocated from the appropriate year’s budget.

This speaks to exactly how people are motivated by budgets.  If you don’t use what was allocated to you by intelligent, sensible mandarins who know better than you ever will, then you obviously don’t know your job, so they reduce your budget the next year, usually by the amount you didn’t spend the year previously.  (/sarcasm on) After all, the wise and brilliant above you would never over-estimate what was needed, as they are intelligent, skilled, diligent guardians of the public purse, who have their fingers on the pulse of all public spending, with extensive systems, checks, balances and audit reports from consultants that back up every dollar allocated. (/sarcasm off)

Or, if you’re in the Senate, you take the unused portion of your budget and write up a contract to your buddy for a report called “The Age Wave” and have it paid for through another company, say Maple Ridge Media or Ottawa ICF, who got the lion’s share of the budget and also probably charges a fee to the Senator for ‘editorial services’ or ‘contract management’, takes their percentage over and above, then strokes you a cheque, not from the Senate, but from a private company. 

On the Hill, this is perfectly normal.  In private industry, this is called a ‘fuzz job’ as the source of the money and the reason for the money being spent is made as fuzzy as possible, preferably through several layers of companies.  Or, you could call it money laundering, but that has such a distasteful connotation doesn’t it? 

Which is why Duffy’s fitness trainer, Mike Croskery was on the stand in Ottawa last week.

Now, we do know some of the players in this game.  Gerry Donohue used to be the NABET (National Association of Broadcast Employees and Technicians) regional union rep at a joint called CJOH-TV.  He was the lead negotiator on the NABET contract and in the late 80’s/early 90’s just a negotiations were starting up, was amazingly and remarkably hired by the company to be their Human Resources guy.  So you had the situation of the previous union rep sitting across the table, as the company rep, during a contract negotiation. 

If this strikes you as a conflict of interest, then you don’t know Gerry Donohue. 

Needless to say CJOH-TV no longer exists, having been absorbed into Bell Media, gutted, populated with interns and turned into a low-rent cable access channel with tower space on the array at Camp Fortune.  Duffy used to work out of CJOH-TV back in the day and that’s most likely how he met Donohue.

Which is also why this trial for Expense Fraud and General Assholery is so much fun to watch. 

Duffy is being hung out to dry because there is no real expense oversight in the Senate.  As long as you don’t try to put your Miniature Weimaraner on the payroll, everything else, is fine. 

The rot starts at the budget office, with the negative implications of actually saving the taxpayers some money off the various budgets.  To turn it upside down and make saving budget a positive incentive, herewith our solution.

If you as a budget manager use smart thinking, creative use of suppliers, shrewd negotiations in keeping with the general Federal guidelines, act fairly and ethically, and manage to come in under budget, you personally get a cash bonus of 2% of the savings to divy up with your team.  The job still gets done, the things get procured under the usual standards and if you can save money, there is no implied penalty of having your budget slashed the next year. 

Budgets change every year, so if one year you didn’t need $100,000 worth of infrastructure improvements that were budgeted for and managed to safely stretch, maintain or otherwise do with what you had, instead of burning money because you could, you’d get a taste.  If the next year, you really needed to spend $150,000 to keep up, then no problem.  Over time, the government would come out ahead, spending when it needed to spend, based on the judgment of those who actually do the job, not on the uninformed esoteric guesstimates of bureaucrats and their consultants in their isolated silos of self-importance and business card title dick measuring. 

Duffy, having been duly briefed by the Senate Budget Office, as to what he can and cannot claim, does what any punk would do, looks for the loopholes.  He goes looking for the very specifics that say You cannot do X.  As soon as you see that they specify X, but not Y, bill for Y.  Which explains why Gerry Donohue became the defacto Royal Canadian Bank of Duffy to hide expenses under the general catchall of ‘communications and research’.

A good auditor, knowing that the Senate is populated by fart-catchers and bagmen for the party should be on high alert for exactly those kinds of fiddles, that in their former lives, the good Senators did as a matter of course, with no more moral baggage of ‘doing wrong’ than loading up on bacon at the breakfast buffet.

The wise betting line is that the Right Honourable Stephen (Call me Stephen) Harper will let this show trial play out, as a sterling example of how totally screwed the Senate is, and fortuitously add a plank to his fall campaign to remove the Senate, using Duffy as the poster child for what is wrong with the Senate and why it should be s-canned.

With any luck, it will distract the public from the real mess, Bill C-51 or the Ministry of Finance’s three-card montie trick of a balanced budget by deferring all spending to 2017.

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