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The federal government has suspended an assistant deputy minister and a director-general – both without pay – in connection with allegations of misconduct in the awarding of federal contract work, a move the two senior officials say is an intimidation effort aimed at silencing their criticism.

Cameron MacDonald, an assistant deputy minister at Health Canada, describes the reprisals against him and Antonio Utano as “Kafkaesque madness” in a strongly worded letter to the House of Commons committee on government operations.

Mr. MacDonald and Mr. Utano, a director-general at the Canada Revenue Agency, previously worked together at the Canada Border Services Agency. Their names regularly appear on CBSA contracting documents related to outsourcing work on the ArriveCan app for cross-border travellers. They were also both connected to another CBSA outsourcing project involving a Montreal software company named Botler.

The House committee is looking into how the cost of the ArriveCan app grew to in excess of $54-million. It is also looking at the growing cost of federal outsourcing in general and Botler’s concerns that the government’s use of layers of subcontracting is not a prudent use of taxpayer dollars.

As The Globe first reported in October, 2023, Botler co-founders Ritika Dutt and Amir Morv brought forward allegations of contracting misconduct to Mr. Utano and others in 2021 and then to more senior CBSA leaders in November, 2022. After receiving that more detailed package of allegations, the CBSA leadership launched an internal investigation and also referred the matter to the RCMP, which is also investigating.

Botler’s November, 2022, report expressed concern about cozy ties and apparent favouritism in the government’s use of private IT consultants. Specifically, they questioned why the CBSA did not hire Botler directly for their work. Instead, Mr. MacDonald urged them in a February, 2020, recorded phone call to “please work with Kristian” and “let Kristian work his magic,” in reference to GCStrategies managing partner Kristian Firth. Botler also questioned why their work was obtained through layers of subcontracting with various IT staffing firms and alleged that their work experience had been inflated by others in forms submitted to the government.

Mr. Firth also urged the two Botler entrepreneurs to single out Mr. MacDonald for praise when meeting with other senior government officials.

“I just want to make sure that he gets taken care of, right?” Mr. Firth told Ms. Dutt and Mr. Morv in a Dec. 11, 2019, recorded conversation.

After The Globe’s reporting, Mr. Firth told MPs in a Nov. 2 appearance that he had altered the résumés and work experience of the two Botler co-founders in contracting grids. He called it an unintentional and regrettable mistake.

When asked during that appearance about his relationship with Mr. MacDonald, Mr. Firth originally told MPs he did not know whether Mr. MacDonald had a cottage. A Conservative MP later asked him whether he would like to reflect on that answer.

“Yes. Mr. MacDonald has never referred to it as a cottage. It’s a chalet,” Mr. Firth told the government operations committee.

Mr. MacDonald later provided dramatic testimony to the committee in a Nov. 7 appearance alongside Mr. Utano, during which they denied any wrongdoing. Mr. MacDonald accused former CBSA vice-president, Minh Doan, who is now the Chief Technology Officer for the government of Canada, of lying to MPs about how Mr. Firth’s two-person IT staffing company, GCStrategies, was selected to work on the ArriveCan app.

Mr. MacDonald also said Mr. Doan had threatened him, a claim Mr. Doan later denied. Mr. MacDonald has been invited back to the government operations committee. His letter to the House committee, which was obtained by The Globe, requests more time to appear and updates MPs on events since their last appearance.

According to Mr. MacDonald’s Jan. 10 letter to the committee, the CBSA had been covering their legal fees, but this has now ended and their security clearances have been revoked.

Chris Spiteri, a lawyer representing Mr. MacDonald and Mr. Utano, confirmed in an e-mail Monday that both men have been suspended without pay.

“In light of the recent actions taken, which we believe are punitive and aimed at damaging their credibility, it appears that efforts are being made to fabricate a case for terminating their employment altogether,” Mr. Spiteri wrote.

He said he and his clients believe that the punitive measures are being taken to “tarnish the reputation and credibility of Mr. MacDonald and Mr. Utano in order to undermine their honest testimony, which exposed misrepresentations made to Parliamentarians by senior government officials.”

He also said the actions send a chilling message to the broader public service.

“We are not familiar with such extreme measures being taken against civil servants in the past,” he said. “It sends a chilling message to the entire civil service, discouraging others from speaking truthfully about any misconduct by their superiors.”

Former Privy Council clerk Michael Wernick said the public finger-pointing by senior public servants is highly unusual.

“I cannot recall any other instance of such public disagreement. It is an outlier,” he said.

Suspensions without pay are also rare, he said.

“It is a very strong measure to suspend without pay while a process is under way and no conclusions have been reached. Usually disciplinary measures follow an investigation being completed and suspension with pay is more common in the early stages,” he said.

“It is also a very strong measure to suspend or permanently revoke a security clearance. It is tantamount to removing someone from that job and any other job that requires that level of clearance. It is not a common occurrence.”

In his letter to committee, Mr. MacDonald says he and Mr. Utano are facing “a rubric of false accusations, cover up and scapegoating” and have not been presented with clear evidence of wrongdoing.

“The CBSA internal investigation is being conducted in a remarkably unusual manner. To this day, and despite several attempts, Mr. Utano and I have not been presented with anything other than bald accusations of wrongdoing. No specifics of any allegations, no details, and no evidence have been presented to us. Instead, we have received threats that if we don’t participate in the investigation that a decision will still be made without our input and that ‘it is in our best interest to participate,’ ” he wrote.

“To this day Mr. Utano and I do not know what we are accused of. This Kafkaesque madness is damaging our health, our professional reputations, our careers and our families,” he wrote. “This campaign of intimidation, retaliation, attempts to muzzle and scapegoat us is offensive, shameful, and brings Canada’s Federal Civil Service into disrepute.”

Spokespeople for the CBSA, Health Canada and the Canada Revenue Agency all declined to respond directly with respect to Mr. MacDonald and Mr. Utano’s employment status, citing federal privacy laws.

“We can confirm that any allegations or suspicions of employee misconduct are taken seriously and are thoroughly investigated. When unfavourable information about an employee comes to the CRA’s attention, the CRA reviews it in the context of whether the employee can still reliably perform their assigned duties,” said CRA spokesperson Sylvie Branch.

CBSA spokesperson Guillaume Bérubé said the investigation into Botler’s allegations is continuing.

Health Canada spokesperson Kori Ghergari also said she could not comment on specific employees.

“At all times, we expect our employees to abide by Health Canada’s Code of Conduct and the Values and Ethics Code for the Public Sector. The department takes any allegations of misconduct seriously and thoroughly investigates any information brought to our attention,” she said.

The committee’s hearings will resume this week. Vaughn Brennan, a consultant who worked with Botler and GCStrategies, is scheduled to appear on Wednesday. On Thursday, MPs are scheduled to hear again from current CBSA president Erin O’Gorman and former CBSA president John Ossowski.

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