Staff at the Ontario Ministry of Transportation are under criminal investigation as part of a probe into "irregular" financial dealings with the private sector and the ministry has been identified as one of several raided last week by the Ontario Provincial Police.
A source familiar with the probe said OPP officers armed with search warrants arrived at the Transportation Ministry's offices last Thursday, where they examined computer files dealing with the purchase of goods and services from private-sector suppliers.
The raid also involved Ontario Realty Corp. and a government official confirmed on the weekend that employees at the Ontario government's real estate arm are also under investigation.
OPP officials said the force's anti-rackets branch, which handles complex fraud investigations, has launched a probe into "irregular financial transactions" involving unnamed government ministries and outside suppliers.
The police may release additional information about the investigation as early as Monday, but it could take much longer, Superintendent Angie Howe said in an e-mail response to questions on Sunday.
But many questions remain unanswered about the probe, including just how many public sector employees are under investigation. It also is not known which other ministries are involved. All telephone calls and e-mails to government officials on the weekend were referred to Craig Sumi, a spokesman for the Ministry of Government Services, who said only that employees in "a few" ministries are part of the investigation.
The Transportation Ministry and Ontario Realty Corp. both have their offices in the Macdonald Block, a sprawling complex that houses ministries as well as senior bureaucrats and cabinet ministers.
Government sources stressed that the probe is confined to employees in the public sector and that no MPPs or their political staff are involved.
Nevertheless, it likely will be difficult for the McGuinty government to distance itself from a developing situation that could become its biggest scandal since eHealth.
At eHealth Ontario there was lavish spending on consultants by an arm's-length government agency. The scandal dogged the provincial government during much of last summer, and ultimately led to the resignation of former health minister David Caplan and a probe by the provincial auditor, who highlighted the role Premier Dalton McGuinty played at eHealth.
Ontario Realty Corp. manages one of the largest real estate portfolios in Canada on behalf of the provincial government. Assets owned or leased by the Crown agency consist of vacant land as well as more than 6,000 buildings, including office towers, heritage buildings, courthouses and jails.
This is not the first time ORC employees have been embroiled in controversy. The Ontario government spent about $23-million in legal and consultant fees pursuing a long-running case dating back to 2000 and involving allegations of bid rigging and fraud at ORC.
The government sued four ORC employees and a group of outside contractors in 2000 for more than $35-million relating to about 40 transactions. After pursuing the case for more than seven years, lawyers acting for the government ended up going after seven of the transactions.
Two ORC employees and one contractor pleaded guilty to a variety of criminal offences, including accepting kickbacks and forging bids. All three agreed to make restitution and received conditional sentences with no jail time.
Karen Howlett