Ex-public servant linked to ArriveCan didn't disclose outside business until after suspension, official says

An IT contractor and former public servant who worked on the ArriveCan app didn't file a conflict of interest report until after he was suspended from the Department of National Defence (DND), a government official says.

David Yeo, founder and president of Dalian Enterprises, was hired by DND in September after spending years accepting millions in government contracts.

Public servants are allowed to have other jobs but must provide the government with a report on their separate business dealings for a conflict of interest assessment within 60 days of being hired.

Bill Matthews, DND deputy minister, said Yeo didn't file a conflict of interest report until March 3. He was suspended in February.

"This report was received after he had been suspended from his position with the department and 165 days after he began working [for DND]," he told MPs on the House public accounts committee on Thursday.

Yeo appeared before the same committee on Tuesday and told MPs 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."

But Matthews said Thursday that the government has evidence he was still involved in Dalian after he was hired at DND.

"Even if [Yeo's assertions] were true, it would not remove the requirement to disclose his business activities to his employer," he said.

"Whether his failure to report his other activities to his employer was due to his poor understanding of the rule, poor judgment or poor ethics, we have evidence that Mr. Yeo carried on in his role at Dalian after joining the public service."

MPs questioned how the department could be unaware of Yeo's business dealings given that Dalian had been a contractor for years.

Matthews said that Yeo's supervisors were aware that he was a contractor for Dalian but suggested they didn't know he was the head of the company.

"He was doing basically the same job as an employee that he was as a contractor," he said.

"They knew he was a contractor. They were unaware of his broader business dealings."

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.

Bloc Québécois MP Nathalie Sinclair-Desgagné pressed Matthews on how the department didn't take notice of one of its employees appearing before a parliamentary committee as the head of a contracting firm.

Matthews indicated that Yeo was "very far down" in the department and suggested that's why no one picked up on his committee appearance.

Assistant Deputy Defence Minister Troy Crosby chimed in to say that he asked the same question when Yeo's position with the department came to light last month. He said that Yeo's supervisors weren't watching committee hearings at the time and Yeo attended committee outside of his working hours.

Matthews said that DND started an investigation into Yeo and Dalian last month and offered to interview Yeo as part of the process. He said Yeo resigned from DND before the interview was conducted.

"We were heading down a process to, in all likelihood, terminate his employment," Matthews said.

"Obviously, before doing that we wanted to give the employee a chance to tell his side of the story. He elected to resign before that happened."

Dalian is one of the contractors facing increased scrutiny due to its work on the controversial ArriveCan app.

 An auditor general report released last month found that the ballooning cost of the project was in part due to the government's over-reliance on government contractors.

While the report stated that it was "impossible to determine" the total cost of ArriveCan due to poor record keeping, the auditor general estimated it cost roughly $60 million. Of that figure, the report suggests Dalian received $7.9 million — although Yeo disputed that figure.

Yeo said Dalian's work on ArriveCan was completed before he took the job with DND.

The government has suspended all contracts with Dalian.