09/04/2012 04:48 EDT | Updated 11/04/2012 05:12 EST

F-35 Controversy: Letter Exchange Shows Disagreement Between Auditor General And DND Over Report


OTTAWA - Prime Minister Stephen Harper may have accepted the auditor general's scathing criticism of the troubled F-35 program, but newly released documents show National Defence and Public Works had deep disagreements with Michael Ferguson's findings.

The final draft of the bombshell report, which accused the departments of hiding the true cost of the multibillion-dollar project and not doing their homework, was the subject of a flurry of letters and protests behind-the-scenes last winter.

As is standard practice, the auditor general's office shared its report ahead of time with National Defence for review before it was made public — and the department's top bureaucrat fired back.

"While we are generally satisfied with the accuracy of the facts as presented in your report, we disagree with your conclusion that National Defence did not exercise due diligence in managing the replacement for the CF-18s," deputy defence minister Robert Fonberg wrote on Feb. 7, 2012, less than two months before the report was released.

The exchange of letters was obtained by the Opposition New Democrats under the Access to Information Act.

As senior government and military officials pored over every line of the report, the head of the Royal Canadian Air Force took issue with the absence-of-due-diligence claim, labelling the auditor's finding as a "misleading statement."

A followup letter on Feb. 24, 2012, signed by both Fonberg and public works deputy minister Francois Guimont, asked the auditor to "present a more balanced story" and wanted Ferguson to point to "specific laws, policies, and/or regulations" that had been violated.

When it was tabled in Parliament last April, the auditor general's report caused a political firestorm that burned throughout the spring.

The Conservatives found themselves under attack in the House of Commons and in the headlines almost daily. The report seemed to erode the Harper government's carefully crafted image as prudent fiscal managers.

"The auditor general's report was very clear about responsibilities," Harper told the Commons on April 4. "The government has accepted the auditor general's recommendations and, clearly, we will act on them to ensure better oversight."

A spokeswoman for Defence Minister Peter MacKay referred questions to Public Works, where a spokeswoman for the minister, Rona Ambrose, repeated the government's acceptance of the report and pointed to a website statement made the day the report was released.

The government took the project away from the Defence Department and gave it to an independent secretariat under the direction of Public Works. It promised more oversight, fresh cost estimates and that it would consider "all options" to replace the CF-18s.

New Democrat defence critic Jack Harris said the government "clearly didn't say: mea culpa" and the documents contradict the public assurances.

"DND accepts nothing that the auditor said," Harris said Tuesday.

"They accept the facts, but not the judgment of the auditor general. It's mind-boggling that you could have this level of contradiction at this level of government."

Fonberg wrote that his "disagreement goes beyond the concern that we have been held to traditional acquisition and project management standards."

He told the auditor general's staff that they failed to appreciate the "uniqueness of the project" and the potential industrial benefits.

One of Ferguson's biggest complaints was the proposed multibillion-dollar purchase lacked enough supporting paperwork and research, something Fonberg conceded, but dismissed as potentially irrelevant to the Harper government's ultimate approval.

"Further, certain traditional steps and documentation may not have been available at the time of the audit, but there is no reason to believe that the lack of this evidence would have resulted in any material change to the government's decision as due diligence was exercised," said the letter.

"They're contradicting not only themselves, but the defence minister, the prime minister," said Harris. "They seem to be all over the place."

One of the biggest criticisms of the program was the fact that the air force did not finalize its written statement of requirements for a replacement aircraft until just before the Harper government announced its intention to buy the F-35 in July 2010.

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