1 2 3 TORONTO COMPUTER LEASING INQUIRY 4 5 6 7 ******************** 8 9 10 BEFORE: THE HONOURABLE MADAM JUSTICE DENISE BELLAMY, 11 COMMISSIONER 12 13 14 15 16 Held at: East York Civic Centre 17 850 Coxwell Avenue 18 Toronto, Ontario 19 M4C 5R1 20 21 ******************** 22 23 24 January 8th, 2003 25

2
  1                        APPEARANCES
  2  
  3  Ronald Manes            )Commission Counsel 
  4  Patrick Moore           )
  5  Diana Groskaufmanis (np)) 
  6  Linda Rothstein         )City of Toronto 
  7  Lily Harmer (np)        )
  8  Robert Centa   (np)     )
  9  Gordon Capern           )
 10  David Moore             )MFP 
 11  Fraser Berrill          ) 
 12  Ken Jones (np)          ) 
 13  Brian Heller   (np)     )Ball Hsu and Associates Ltd.
 14  Melissa Kronick (np)    )CUPE 
 15  Raj Anand (np)          )Lana Viinamae
 16  Bay Ryley               )
 17  William Anderson        )Wanda Liczyk
 18  Valerie Dyer (np)       )Dell Computers
 19  Jennifer Lynch (np)     )
 20  Edward Greenspan (np)   )Jeff Lyons
 21  Todd White (np)         )
 22  Hugh MacKenzie          )Jim Andrew
 23  Paul Cavalluzzo (np)    )Dash Domi
 24  Benjamin Barnes         )
 25  Joyce Ihamaki           )Registrar

1 TABLE OF CONTENTS 2 Page 3 PETER WOLFRAIM, Resumed 4 Continued Cross-Examination 5 by Ms. Linda Rothstein 5 6 7 Cross-Examination by Mr. Hugh MacKenzie 83 8 Cross-Examination by Mr. David Moore 94 9 10 Certificate of Transcript 190 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 EXHIBITS 2 No. Description Page 3 9 2 page unbound document 90 4 titled " City of Toronto, 5 Information Technology 6 Services Branch" dated 7 April 30, 1999 and May 03, 1999 8 9 10 10 MFP Financial Sources Ltd. 158 11 Annual Report Fiscal 2000 12 pages 1 to 48 13 14 15 16 17 18 19 20 21 22 23 24 25

1 --- Upon commencing at 10:00 a.m. 2 3 THE REGISTRAR: The inquiry is now in 4 session. Please be seated. 5 6 PETER WOLFRAIM, Resumed 7 8 MADAM COMMISSIONER: Good morning. 9 10 CONTINUED CROSS-EXAMINATION BY MS. LINDA ROTHSTEIN: 11 Q: Good morning Mr. Wolfraim. 12 A: Good morning. 13 Q: Would you please turn to Volume 3 Tab 56 14 please? 15 MADAM COMMISSIONER: Volume 3 Tab which? 16 MS. LINDA ROTHSTEIN: 56. 17 MADAM COMMISSIONER: 56. 18 Just before we do -- Mr. Manes, is there 19 someone you would like to introduce me to? I just see 20 somebody new in the -- 21 MR. RONALD MANES: Yes, Mr. Ben Barnes is here 22 on behalf of Mr. Cavalluzzo's office. 23 MR. BENJAMIN BARNES: Good morning. 24 MADAM COMMISSIONER: Good morning. 25 MR. BENJAMIN BARNES: I --

1 MADAM COMMISSIONER: Counsel -- I'm sorry Mr. 2 Barnes, I know in Court -- good morning -- 3 MR. BENJAMIN BARNES: Good morning. 4 MADAM COMMISSIONER: I know in Court one 5 stands to address the Bench, but here because we're all 6 linked in with microphones, one needs -- one needs to sit 7 otherwise the Court Reporter can't hear you at all. 8 Did you wish to speak with Mr. Manes before 9 raising a preliminary issue, or do you want to have a little 10 chat first? 11 MR. BENJAMIN BARNES: Just one second, I think 12 we can -- 13 MADAM COMMISSIONER: All right. I need to 14 start up my computer in any event. 15 16 (BRIEF PAUSE) 17 18 MR. BENJAMIN BARNES: Sorry, good morning. 19 MADAM COMMISSIONER: Good morning, yes, Mr. 20 Barnes. 21 MR. BENJAMIN BARNES: Yes, there's just two 22 (2) -- 23 MADAM COMMISSIONER: You're representing? 24 MR. BENJAMIN BARNES: I'm an associate of Mr. 25 Cavalluzzo, we're currently representing Mr. Domi.

1 MADAM COMMISSIONER: Right. Okay. 2 MR. BENJAMIN BARNES: And as you are aware, 3 Mr. Cavalluzzo was only recently retained and Mr. Domi, of 4 course, was granted standing in this matter yesterday. 5 MADAM COMMISSIONER: Yes. 6 MR. BENJAMIN BARNES: And Commission Counsel 7 has been actively cooperating in ensuring that we get the 8 documents in electronic form, that's an ongoing process and 9 we're still coming up to speed. 10 So, there are two (2) problems that I want to 11 raise with you now. The first is, it was going to be our 12 suggestion, and it still is our suggestion, Mr. Cavalluzzo or 13 someone on Mr. Domi's behalf, may have some limited questions 14 for Mr. Wolfraim. 15 We understand that Mr. Wolfraim is likely to 16 be recalled as a witness at a later date. And our suggestion 17 is it would probably be a more economical and efficient use 18 of the Inquiry's resources to defer any questions Mr. 19 Cavalluzzo might have until -- or someone else acting on Mr. 20 Domi's behalf, until such time as Mr. Wolfraim is recalled. 21 And I understand that from conversations with 22 both Commission Counsel and Mr. Moore about that. 23 Secondly, and just to make you aware of it, 24 there is an ongoing scheduling problem involving Mr. 25 Cavalluzzo and Mr. Domi, which is yet to be sorted out. I

1 just wanted to put that on the table. 2 We'll keep you advised of it. But, I'm -- I'm 3 not sure where that's going to end up ultimately, which is 4 the second good reason, I think to protect Mr. Domi's 5 interests, to -- it would be appropriate at this point to 6 defer any questioning of Mr. Wolfraim on his behalf until a 7 later date. 8 MADAM COMMISSIONER: Okay. Well, we had 9 anticipated yesterday that Counsel for Mr. Domi would likely 10 not be in a position to cross-examine Mr. Wolfraim until Mr. 11 Wolfraim returned. 12 So, that's not a problem and Mr. Moore on 13 behalf of -- Mr. David Moore on behalf of MFP is prepared to 14 go with his examination today, in any event. 15 With respect to the scheduling difficulty, one 16 of the problems one has in an Inquiry is that most busy 17 lawyers always seem to have scheduling difficulties. 18 So I and Commission Counsel do our best to try 19 to accommodate as many scheduling difficulties as we can 20 recognizing that sometimes it simply is not possible. 21 And certainly we've had that already occur. 22 But, we will do everything we can to accommodate Mr. 23 Cavalluzzo or someone else from his firm, if someone else is 24 going to be here. 25 And I would suggest that you keep in close

1 contact with Mr. Manes and that you also keep a close watch 2 on our website, www.torontoinquiry.ca. Usually our 3 transcripts are on the website by about an hour and a half, 4 or so, after the Inquiry is over for the day. 5 Sometimes it's a little bit later, but, 6 generally it's up by around 6:00 o'clock. All right? 7 Anything else? 8 MR. DAVID MOORE: I am just going to say that I 9 did speak to Mr. Cavalluzzo last night and -- and -- and you 10 know, his reaction or position was as you've heard this 11 morning and I have no problem with that. 12 Frankly, I had anticipated being in a 13 position, myself, of questioning Mr. Wolfraim later than it's 14 turning out to be. I, frankly, was anticipating perhaps even 15 Thursday or Friday this week, but that's not going to be the 16 case. It will be my suggestion or request, if the City 17 finishes before the normal lunch time at one o'clock that the 18 completion of their questioning, if that occurs before the 19 normal lunch time, that we break for lunch at that point. 20 MADAM COMMISSIONER: Sure. 21 MR. DAVID MOORE: I will then consolidate my 22 notes. That'll make the process more efficient from my 23 standpoint. 24 MADAM COMMISSIONER: Mr. Moore, I'm prepared 25 to go even further. If you need -- if we -- if we take a

10
  1  longer lunch and that results in you being able to tighten up
  2  your time frame, then I'm prepared to accommodate you that
  3  way, as well.
  4                 MR. DAVID MOORE:   That -- that's much
  5  appreciated and -- and indeed, it -- I'm looking -- I -- I --
  6  just to let Counsel know now.  In -- in terms of my
  7  questioning of Mr. Wolfraim, the intention of calling him at
  8  this juncture in the Inquiry is -- was to provide somewhat of
  9  an overview of the --
 10                 MADAM COMMISSIONER:   Right.
 11                 MR. DAVID MOORE:   -- MFP position and so --
 12  and of course, it's -- it's -- it's coming well before -- a
 13  lot of the detailed evidence about the documents and
 14  chronology is even on the record and so I'm -- I'm mindful of
 15  that and I'm -- I -- my intention is to -- to treat my
 16  questioning accordingly and -- and not to take Mr. Wolfraim
 17  through the chapter and verse of what we're going to hear
 18  about over the next several weeks or months -- and -- and --
 19  and when he comes back, it will probably be a more
 20  appropriate time to get into that level of detail. 
 21                 So, that -- I just let Counsel know that and 
 22  -- and as I say, in -- in -- in mulling this over last night,
 23  that's my intended approach and I think a -- a break when the
 24  City's finished will allow me to complete that consolidation.
 25                 MADAM COMMISSIONER:   All right and I take it,

1 then, that you are also letting Mr. Wolfraim know that when 2 he comes back the next time, he might actually be here for 3 just as long as he's been this time? 4 MR. DAVID MOORE: If not longer. 5 6 (BRIEF PAUSE) 7 8 MADAM COMMISSIONER: If not longer? Poor Mr. 9 Wolfraim. 10 All right. Are you ready, Mr. Wolfraim -- 11 THE WITNESS: Yes. 12 MADAM COMMISSIONER: -- to continue today? 13 All right. Ms. Rothstein? 14 15 CONTINUED BY MS. LINDA ROTHSTEIN: 16 Q: Mr. Wolfraim, Tab 56 of Volume 3. Begdoc 17 42224. These I understand, Mr. Wolfraim, you hadn't had an 18 opportunity to review with your Counsel, I think, until 19 yesterday. They constitute what I understand to be some 20 notes taken in her own hand, by Irene Payne during the period 21 August 9, '99 to October '99? Is that your understanding as 22 well? 23 A: No, I -- these are notes, I think, of 24 Christine Vivaldo, her Executive Assistant. 25 Q: Oh? Okay. You're telling me something

1 that I didn't know. Okay, that's helpful. 2 In any event, sir, I don't propose to take you 3 through them. You didn't make them and that -- that isn't my 4 purpose but they make reference to a couple of topics and I'd 5 like to ask you about those. 6 They make reference to a trip to Hawaii. You 7 would have looked through them and seen that. 8 A: Correct. 9 Q: I'm wondering, sir, what you can tell me 10 about a trip to Hawaii that appears to involve Ms. Payne and 11 some of her sales force? 12 A: We -- Irene took over the management of 13 the sales force in the fall of '97 and she was a big believer 14 in incentive trips for her sales force and I guess beginning 15 in the fall of '98, there was a trip to Hawaii that she 16 planned for her whole sales force, along with their spouses 17 and they went for five (5) or six (6) days to Italy. 18 Then in -- her -- her plan was that for the 19 fall of '99, that they'd go to Hawaii and -- but only those 20 that -- that hit their quotas. She had set goals and quotas 21 for them and those that hit their goals or quotas would go. 22 Q: Do you know who was on the list of having 23 hit goals and quotas? 24 A: Well, I'm coming to that. 25 Q: Okay.

1 A: As it turns out, this was -- I think we 2 talked -- that one (1) of the things about these -- these 3 events is that they are co-sponsored by MFP and -- and some 4 of our equipment suppliers. 5 So, about 50 to 60 percent, and I'm not sure 6 the exact amount, but at least half of the cost would have 7 been paid by hardware vendors and -- and they go along and -- 8 and it's a working sales trip and -- and so the vendors get 9 twenty-five (25) sales reps as a captive audience for five 10 (5) or six (6) days. They get to make presentations to them 11 and convince them that their products are their -- are the 12 best. 13 And occasionally other companies, that 14 included customers as well, to give testimonials and say why 15 -- why is it that you deal with this company. So this was a 16 -- the Hawaii trip ended up involving all of the sales force 17 and their spouses. 18 Q: Hmm hmm. 19 A: There weren't -- I guess the -- it's a 20 bit of an -- I guess an irony in the sense that because the - 21 - there probably only half of the people met their numbers 22 and were eligible to go on the trips. 23 But in order to get the vendors to pay we had 24 to send all the sales force. So this -- the Hawaii trip was 25 going to be the last one (1) because it clearly wasn't a

1 workable strategy. 2 This is one (1) of those areas where I think 3 in '99, as we talked about a little bit yesterday, from a 4 cultural standpoint, there was a bit of a divergence. 5 Irene was going in a different direction from 6 me and in terms of her vision for the company was to take it 7 in a slightly different direction. And I was -- 8 Q: I'm not sure I know what you mean by the 9 Mr. Wolfraim, can you be more specific? 10 A: Yesterday we talked about -- about company 11 culture, management chemistry and if you went to I think -- I 12 think my comment was, that if you went to five (5) different 13 MFP executives and asked them the same question, you'd get a 14 similar answer. 15 And I think the Commissioner asked, was that 16 true in '99? And I'd say, if you'd go back over the last 17 twenty (20) years, and for probably eighteen (18) or nineteen 18 (19) of the last twenty (20) years, you would get the same 19 answer. 20 In late '98 and during '99, Irene and I had a 21 different vision. And she wanted to see the company raise 22 its profile, go for more aggressive top line growth. She 23 wanted to invest heavily in the technology sector and so 24 forth. 25 My view was, that I'd never been a high

1 profile, her model was something like that NewCourt model, 2 which was a rapidly growing financial services company at the 3 time. 4 My view was, that the status quo made sense 5 and I felt the technology finance market was a relatively 6 mature market and if we were going to diversify in the 7 future, it made more sense for us to look at other financial 8 services businesses as much as or in lieu of investing more 9 heavily in the technology market. 10 So, these sales meetings were one (1) of those 11 things -- where we didn't quite see eye to eye. And -- 12 Q: Okay. I just want to understand that for 13 a moment, pardon me, Mr. Wolfraim. Sorry -- have you 14 finished? 15 A: Yes. 16 Q: Okay. I understand that she wanted to 17 invest more of the company efforts and business ultimately in 18 the technology side of things, you didn't. I understand 19 that. 20 I want to understand the link you make between 21 that and the culture of your company, because I'm not sure I 22 yet understand what you are implying was a different vision 23 of what the culture of MFP ought to have been? 24 A: Okay and I'm talking there about some of 25 the expenses being undertaken --

1 Q: Okay -- 2 A: -- and being approved and reimbursed. 3 Q: All right. And do I take you to be 4 implying to the Commissioner that things like an expensive 5 trip to Hawaii for a sales force of MFP was something that if 6 you'd been in charge, or rather in Ms. Payne's position, you 7 would not have agreed was the way to go? 8 A: Well, it's the last one (1) that we ever 9 did and I -- and she knew it was the last one (1) we were 10 going to do, let's put it that way. 11 Q: And that's because you didn't think that 12 was the right kind of culture to create for MFP, is that what 13 I hear you saying? 14 A: That's right. 15 Q: All right. Did the Hawaii trip take 16 place? 17 A: Yes, it did. 18 Q: All right. Did you know that part of her 19 plan, whether you agreed with it or not, did you know that at 20 some stage, she appears to have contemplated inviting 21 employees of the City of Toronto on that trip? 22 A: I had seen that from the notes. 23 Q: Did you know that at the time, Mr. 24 Wolfraim? 25 A: No.

1 Q: Had you known in the fall of '99 that it 2 was part of Ms. Payne's at least initial plans, to invite it 3 would appear from these notes, either or both of Mr. Andrew 4 or Ms. Liczyk and we'll have to hear from her how far that 5 went -- 6 A: Hmm hmm -- 7 Q: -- would you have approved of that, sir? 8 A: Under very limited circumstances. If it 9 was acknowledged by the most senior levels at the City, for 10 example, the Mayor or some level like that, that they were 11 going along and they were serving a purpose which was to 12 present to the MFP sales force why the City of Toronto -- 13 what they liked and didn't like about doing business with 14 MFP, then that may have been acceptable. 15 But, I didn't -- we didn't have the 16 conversation so I -- 17 Q: Right. 18 A: -- in principle, no. 19 Q: So if I understand your evidence, sir, if 20 Ms. Payne had come to you and I take it she ought to have on 21 an issue like that, in your view? 22 A: Well, she came to me when her agenda was 23 finalized. 24 Q: Right. 25 A: So, I -- sorry --

1 Q: Let me do this step by step. I take it 2 that you start from the proposition that if Ms. Payne was 3 contemplating inviting City officials on a -- on a MFP 4 sponsored sales trip to Hawaii, she ought to have discussed 5 that with you? 6 A: If she was thinking about it, yes. Before 7 she took any further action -- 8 Q: Right -- and if she had done so, you would 9 have said, I don't think it's appropriate unless there's 10 absolutely no doubt that the City of Toronto as an 11 institution knows about it and approves of such a trip? 12 A: And even there I'd have a problem with it, 13 because it's in direct violation of our own code of conduct. 14 The example we use from one (1) end of the 15 spectrum or the other is -- is at one (1) end of the 16 spectrum, it's an all expenses paid trip offered by the 17 supplier. 18 Q: Thank you, that's very helpful and I take 19 it apart from that, you can't assist us as to how far Ms. 20 Payne actually went in making invitations, sending them or -- 21 or what happened there. We'd have to ask her. 22 A: Yeah. I don't know. I'm sorry. 23 Q: All right. Now, the other thing in her 24 notes that I noted and it's really a small point, is there is 25 some indication in here that you gave out actual awards as

1 part of, I gather, boosting morale within your company and 2 there's some notation in here I saw about Mr. Domi being 3 identified as Rookie of the Year? 4 A: Yes. 5 Q: Again, is that something you knew about 6 at the time, Mr. Wolfraim? 7 A: I would have known as -- as the -- as the 8 agenda was finalized and we -- we would at -- at sales 9 meetings in the previous years, at some of the l -- slightly 10 less glamorous locations, we would have had prizes. Although 11 they, for the most part, are joke prizes. That these are -- 12 I'm not calling these joke prizes but we recognized 13 individual sales people for different achievements. 14 Q: And so was Mr. Domi, in fact, recognized 15 through some process of award -- 16 A: I think he was -- 17 Q: -- as the Rookie of the Year? 18 A: -- I believe he was. Yes. 19 Q: And that was in the 1999 year? 20 A: That was at Hawaii, yes. 21 Q: And am I right, sir, in understanding 22 that that was premised entirely on him having been 23 instrumental in securing the City of Toronto leasing 24 technology business? 25 A: Irene could answer better than I, but I

1 would assume so. 2 Q: Do you know of any other significant 3 customer that he, if I can put it this way, assisted in 4 landing during that period? 5 A: Nothing. Nothing of -- no. Nothing of 6 that -- 7 Q: Do you know of any other customer that he 8 was actively engaged in courting during that year? 9 A: Oh yes. 10 Q: All right. Could you tell -- 11 A: Well, I shouldn't say do I know. I don't 12 know the names of all the customers. I know he had other 13 accounts. 14 Q: Okay. 15 A: And I -- but I don't know the names of 16 them. I -- I can't remember them off hand. 17 Q: Do you know in what sector they were? 18 A: Mainly public sector. 19 Q: All right. So we should ask Ms. Payne 20 about that or Mr. Domi? 21 A: Or Mr. Domi. Either one (1) should have 22 -- they should have his account list. 23 Q: All right. Mr. Wolfraim, I think you've 24 probably covered this off with Commission Counsel, but just 25 so I have it clearly. Can you give us a precise list, to the

1 best of your recollection, of those -- either employees or 2 officials at the City of Toronto that you had the opportunity 3 to meet in the course of your company's relationship with the 4 City. 5 I know you've told us about Ms. Liczyk? Yes? 6 A: Well, I guess you'd start with Ms. Hoy. 7 Q: Okay. 8 A: Mr. Ridge. 9 Q: But I -- I -- actually, that would really 10 expand it. 11 A: Okay. 12 Q: Let's start chronologically, if we could. 13 A: Oh, okay. 14 Q: And -- 15 MADAM COMMISSIONER: And what are you -- what 16 are you? 17 MS. LINDA ROTHSTEIN: I want to know the list 18 of people Mr. Wolfraim had the opportunity to meet and greet 19 in the -- in the lead up to MFP getting Council approval for 20 the $43 million in July -- 21 THE WITNESS: July of 2 -- 22 MS. LINDA ROTHSTEIN: -- of 1999. 23 THE WITNESS: July of '99? 24 MS. LINDA ROTHSTEIN: Yeah. 25 THE WITNESS: No one.

1 2 CONTINUED BY MS. LINDA ROTHSTEIN: 3 Q: No one? Okay and after that but prior 4 to, if I can put it this way, there being a problem in the 5 relationship between the City of Toronto and your company, 6 you would have met Ms. Liczyk? 7 A: Yeah. Let me -- that's not fair. I did 8 meet Mr. Andrew. I knew -- I had known Mr. Andrew from 9 before, so. 10 Q: Okay. Can you just be precise as to the 11 nature of the relationship you had with Mr. Andrews before? 12 A: Yeah. I -- he would have been at -- I 13 would have seen him from time to time at customer events and 14 diff -- both MFP events and other events but -- 15 Q: Right. 16 A: He was with one (1) of the ministries, I 17 believe the Ministry of Natural Resources, and that was a Min 18 -- one (1) of the ministries that we'd done business with 19 over the years. 20 Q: And so you actually knew him before he 21 assumed any position at the old Metro Toronto? 22 A: I believe so, but I can't -- I can't 23 identify a specific date as to when I met him or where or 24 anything like that, but -- 25 Q: And Mr. Wolfraim, I can get the exact

1 testimony, if you think it's important or your Counsel does, 2 but do you remember that Mr. Manes put to you the question 3 that Mr. Andrew was known to you as someone who, I think the 4 words were, liked to be entertained, and you agreed with 5 that? Do you remember that? 6 A: As soon as I said that, I knew I'd regret 7 having said it but yeah, I said it. 8 Q: All I want to know is from what source do 9 you derive that -- 10 A: Oh, I -- 11 Q: -- view? 12 A: -- Jim's a -- he's a very outgoing, 13 gregarious individual and -- and I think he enjoys being with 14 people and out and about and that sort of thing. So, that -- 15 that's a -- 16 Q: Okay, and my -- but my precise question 17 for you, sir, is whether that's your own perception of Mr. 18 Andrew, or whether you're, in fact, conceding that that was 19 how he was described by others in your company? 20 A: That would be my own perception. 21 Q: Thank you. 22 A: Okay, so going -- moving on from Mr. 23 Andrew, I think I met Ms. Liczyk in the fall of '99. 24 Q: Hmm hmm. 25 A: I -- the first -- well -- the first time I

1 remember, I remember we had a box date just before Christmas 2 which was just after Irene had left MFP, and it's listed in 3 here -- I think the dates in here. 4 But, I know she was there, but I can't 5 remember and I'm pretty sure I'd met her before that, but I'm 6 not sure exactly when. 7 Q: And if I recall your evidence in response 8 to Mr. Manes questions, you think in total you would have met 9 her three (3) times, no more, is that fair? 10 A: There's probably -- it strikes me as more 11 than three (3) times, but -- 12 Q: All right -- 13 A: -- over two (2) years, five (5) or six (6) 14 times, maybe I guess. 15 Q: And did I understand correctly that each 16 and every time you met Ms. Liczyk it was at a sporting event 17 or no? 18 A: It would have been at an event, at an 19 event of some sort -- 20 Q: All right -- 21 A: -- not necessarily a box at the Air Canada 22 Centre or anything, but at an event or some sort. So whether 23 it's -- 24 Q: If it wasn't a box at the Air Canada 25 Centre, what other events would you have been at, sir, that

1 she may well have been at? 2 A: There may have been golf tournaments -- 3 Q: Okay -- 4 A: -- or a golf tournament. 5 Q: Is there a category of events, you can 6 help us with? 7 A: Nothing comes to mind, right away. 8 Q: Now, what about Mr. Nigro, Vince Nigro? 9 In the fall of -- or rather sorry -- in the winter of '99, we 10 know he was still in the Mayor's office and I believe you 11 told me yesterday, Mr. Wolfraim, that by April of '99, he had 12 departed for TEDCO, as you understand it? 13 A: That's what he told me, was that he was at 14 TEDCO by April of '99. I'd met him, I met him I'd guess 15 again in the fall of '99, through Dash. 16 Dash I think indicated that he met him through 17 his family, and it would have been again, at events. 18 Q: And when Mr. Nigro was at TEDCO, what was 19 the interest that MFP had in networking with him? 20 A: I think Dash was looking to tap into 21 Vince's contact network. Dash was trying to figure out who 22 was -- 23 MADAM COMMISSIONER: To what? 24 THE WITNESS: I'm sorry. 25 MADAM COMMISSIONER: He was looking to?

1 THE WITNESS: Tap -- tap into -- 2 MADAM COMMISSIONER: His what? 3 THE WITNESS: His contact network. 4 MADAM COMMISSIONER: Contact, okay. 5 THE WITNESS: Contact network. So, Dash was 6 trying to meet as many people as he could and trying to find 7 out, kind of, who was where and what deals were where and try 8 to identify opportunities that he could bring back and see 9 whether or not they fit. 10 11 CONTINUED BY MS. LINDA ROTHSTEIN: 12 Q: And was it your operating assumption that 13 Mr. Nigro, although he had left government -- left the City, 14 left other government positions and was at TEDCO, was still 15 in a position where he networked regularly with various 16 people in government? 17 A: I don't know that he -- absolutely, yes. 18 Yes. 19 Q: And that was one (1) of the reasons why 20 someone like Mr. Nigro could be valuable to Mr. Domi? 21 A: Yes. 22 Q: And can you be more precise as to any 23 understanding that you derived from Mr. Domi or Ms. Payne as 24 to who Mr. Nigro had connections with? 25 A: His were -- I remember there was a lot of

1 discussion around the federal connections. 2 Q: Hmm hmm -- 3 A: And he was connected with the Eggleton -- 4 or Minister Eggleton, I guess, who'd been a former Mayor of 5 Toronto and Minister Collenette, he was quite close to. 6 Q: Hmm hmm -- 7 A: And, in fact, I'd met Minister Collenette 8 with Vince, and I can say they're close friends. So that's - 9 - they were friends. 10 Q: All right. And what about at the Toronto 11 municipal government level? Obviously Mr. Nigro had a 12 connection with the Mayor. Who beyond -- you're nodding, 13 sir, yes? 14 A: No, I'm shaking my head. I don't know. I 15 can't recall any -- I'm trying -- I'll let you finish your 16 question, sorry. 17 Q: Who beyond the Mayor, do you remember 18 being told Mr. Nigro had connections with at the City of 19 Toronto? 20 A: I don't -- other than I would have assumed 21 that if he had been in and around the City for a number of 22 years, he would have known lots of people, I would have 23 thought. 24 Q: All right. And did you -- I just want to 25 be clear about this. Did you have an opportunity to meet any

1 of the City of Toronto Councillors at any social event 2 sponsored by your company? 3 A: I don't remember ever meeting one (1). 4 No. 5 Q: And would there be any other employees of 6 the City that you recall meeting at an MFP sponsored social 7 event? 8 A: Yes. Lana Viinamae. 9 Q: How -- how many times did you meet her? 10 A: Three (3) or four (4) times, I would say. 11 Q: And in what period of time, sir, to the 12 best of your recollection? 13 A: It would have been sort of late -- I 14 don't know when I -- when I first met her. It might have 15 been the winter of 2000. During the calendar 2000, possibly 16 2001, as well that I met her. I remember seeing her once 17 during early 2001. 18 Q: And in addition to Lana Viinamae and 19 everyone you've identified, do you recall meeting any other 20 employees of the City of Toronto at an MFP sponsored event? 21 A: The only other one (1) whose name I 22 remember hearing and I -- but I can't picture her, is 23 Katherine Bulko. 24 Q: All right. May I ask you then, Mr. 25 Wolfraim, to turn to the expense account summary that

1 Commission Counsel prepared with respect to Mr. Domi's 2 expenses at Volume 3, Tab 57. 3 4 (BRIEF PAUSE) 5 6 Q: And I take it if we start with entry 1, 7 which goes all the way back to 01/27/98. If you look at that 8 first page, there's nothing, assuming those are all true, 9 that would have troubled you about the propriety of those 10 expenses? Do I fairly anticipate your view? 11 A: Just trying to -- 12 MADAM COMMISSIONER: I'm not sure what you're 13 -- are you just asking him about the -- what happened in 1998 14 or those -- 15 MS. LINDA ROTHSTEIN: I'm looking at the 16 first page, Commissioner, which takes us, actually, through 17 as I read it to 02 -- 02/10/99 and -- 18 MADAM COMMISSIONER: Right. February 10, 19 '99. 20 MS. LINDA ROTHSTEIN: -- and I really want to 21 know if there's anything on that page that on the face of it 22 looks troubling. Either in terms of timing or the person 23 involved or -- 24 THE WITNESS: It -- this October 27 is 25 probably what the first one (1) should say. It should be

1 10/27 as opposed to 01/27. 2 MS. LINDA ROTHSTEIN: Okay. 3 MADAM COMMISSIONER: Oh. 4 MS. LINDA ROTHSTEIN: I think you're probably 5 right about that. It's not clear what that is exactly, but 6 in any event. 7 MR. DAVID MOORE: Can -- can I just ask My 8 Friend whether it is in her intention to go through each page 9 of this in this way? 10 MS. LINDA ROTHSTEIN: No, very -- I'm going 11 to go through this quite -- quite expeditiously, 12 Commissioner. 13 MADAM COMMISSIONER: I -- I -- I'll tell you, 14 Mr. Moore, I assumed that it wasn't because she said she'd be 15 finished in an hour and a half and she wouldn't be if she 16 went through all of these and she's now said that she's not. 17 MR. DAVID MOORE: Fair enough. 18 MS. LINDA ROTHSTEIN: In fact, I'm trying to 19 go through it quickly as a page. 20 MR. DAVID MOORE: No. Well, that's my 21 question. Is it -- that's exactly what my -- I didn't make 22 myself clear. Is it My Friend's intention to, kind of, ask 23 the witness to look at each page -- 24 MS. LINDA ROTHSTEIN: No. 25 MR. DAVID MOORE: -- and offer a generalized

1 conclusion -- 2 MS. LINDA ROTHSTEIN: No. 3 MR. DAVID MOORE: -- starting with the first 4 page and going from there, but fine. 5 MS. LINDA ROTHSTEIN: No, but this will 6 actually go faster if I can just do it and if I'm giving a 7 few questions as opposed to one (1) -- 8 MADAM COMMISSIONER: Go ahead. 9 MS. LINDA ROTHSTEIN: -- I think it'll go 10 smoother. 11 12 CONTINUED BY MS. LINDA ROTHSTEIN: 13 Q: So, I take it there's nothing 14 particularly troubling on that page? 15 A: I do see Vince Nigro's name, but it's 16 kind of once a month or once, so. 17 Q: Just on that point, is there anything 18 wrong at all with, in your view, sir, with Mr. Domi going out 19 for dinner with Mr. Nigro -- 20 A: No. 21 Q: -- while he was in the Mayor's office? 22 A: No. 23 Q: No. In fact, you would have thought that 24 that was what he should be doing -- 25 A: Yes.

1 Q: -- is making that kind of a contact. 2 Fair enough. A couple of questions as we get down to Number 3 19 on Page 2, which would appear to me to be the 22 of March 4 '99. Just if you can help me, sir, with who J. Rollock is? 5 A: John Rollock was a government sales 6 manager at MFP that Dash would have reported to and who, in 7 turn, reported to Irene. 8 Q: Right. So, Number 19 would not appear to 9 be specifically any expense in -- with a City of Toronto 10 employee. It would appear to be a meeting of MFP persons who 11 were working on the account, having lunch and quite 12 appropriate, I can say. 13 A: They were working on a -- on a variety of 14 accounts. 15 Q: Yeah. All right and -- but if we go 16 through to page number -- 17 MADAM COMMISSIONER: Sorry -- excuse me, sir, 18 up above -- we just have one (1) camera in the courtroom and 19 it's down here in the Hearing room. Thank you. 20 Okay. Sorry to have interrupted you, Ms. 21 Rothstein. 22 23 CONTINUED BY MS. LINDA ROTHSTEIN: 24 Q: If we go through to the next page, Mr. 25 Wolfraim, page 3, John Dansen's name comes up and I'm

1 wondering if you can just assist the Commissioner in 2 understanding why Mr. Domi, would have thought it appropriate 3 to be spending MFP expense monies on a meeting with him? 4 Do you know anything about that? 5 A: I don't know who John Dansen is -- 6 Q: All right -- 7 A: -- other than what I've read in the 8 papers. But I would assume that as with Vince and Rob 9 Godfrey, these are people that he's come to know and he's 10 trying to use them to tap into their contact networks, I 11 guess. 12 Q: And assuming that's the case, then from 13 your point of view, that's exactly what he should be doing 14 and there's nothing inappropriate about that, is that fair? 15 A: No, that's right, yes. 16 Q: If we move forward on this summary to page 17 7, I understood you to testify yesterday, Mr. Wolfraim, that 18 there is a period of time that you and I would agree is 19 procurement sensitive, when there oughtn't to be any 20 entertainment of City employees or officials. 21 And let me see if I have this right. That 22 period would, in your mind, commence once the RFQ is formally 23 issued? 24 A: That's right. 25 Q: So, starting on May 31, which we know was

1 the date of the issuance of the RFQ, you would be of the view 2 that MFP should be hands off any entertaining with City 3 employees or officials? 4 A: Right. Well, any would be a mutual thing. 5 Q: Right, absolutely, the City had the 6 responsibility as well. Please don't misunderstand any of my 7 questions. My client is quite clear, that they ought not to 8 be doing this. 9 A: Right. 10 Q: But, just looking at your side of the 11 ledger -- 12 A: Hmm hmm -- 13 Q: -- you agree that equally your employees 14 ought not to be doing it during a procurement sensitive 15 period, if I understand you correctly, sir? 16 A: Yes. 17 Q: And so, if you look, starting at number 54 18 and again accepted at face value, it appears to be with Mr. 19 Nigro, you told us he's at TEDCO, so maybe that one (1) is 20 okay, if he's not -- if he's no longer with the City of 21 Toronto, would that be your sense of it, sir? 22 A: Yes. 23 Q: All right. And we go down to the next 24 one, number 55, we don't know who it is, but if it was a City 25 of Toronto employee or official, that would be offside?

1 A: That's right. 2 Q: And if the next one (1), 56, can be taken 3 at face value, having occurred on the 4th of June of '99, and 4 was indeed a lunch and drinks with Tom Jakobek, that would be 5 offside -- 6 A: Yes -- 7 Q: -- from your view of the world? 8 A: Yes. 9 Q: And so too as we go down the page that 10 follows this, page 8, number 57 would be offside on that 11 basis, sir? 12 A: Yes. 13 Q: Number 58 would be offside on that basis, 14 sir? 15 A: Yes. 16 Q: 59? 17 A: Yes. 18 Q: Yes? 19 A: Yes. 20 Q: 60 maybe okay because Mr. Nigro is no 21 longer an employee or any other actual representative of the 22 City of Toronto? 23 A: Right. 24 Q: At 61 I looked at because it's a bit 25 confusing, Mr. Wolfraim, let me just tell you that it says on

1 the receipt itself, I assume it's Mr. Domi's handwriting, US 2 funds, part of Philadelphia trip expense. 3 But if you actually look at the receipt, it 4 would appear to be a Morton's of Chicago invoice for the 5 restaurant located on Avenue Road here in Toronto. 6 So, assuming that that was as it purports to 7 be, a City of Toronto meal, on the 11th of June, 1999, that 8 would be inappropriate entertainment of City personnel during 9 a procurement sensitive period? 10 A: Yes. 11 MR. DAVID MOORE: I know My Friend is saying 12 on this basis on every one of them, but there's an implicit 13 if not explicit assumption in all these questions that the 14 City of Toronto person was present at these instances. 15 MS. LINDA ROTHSTEIN: Commissioner, I think 16 I've made absolutely clear that I'm very aware of the fact 17 that at the moment that has not been proven to anyone's 18 satisfaction. 19 MADAM COMMISSIONER: I have no difficulty with 20 what you're saying. 21 MR. DAVID MOORE: All right. 22 23 CONTINUED BY MS. LINDA ROTHSTEIN: 24 Q: There wouldn't be a problem, then, with 62 25 or 63. Again, Mr. Nigro, Mr. Wilkinson.

1 A: Correct. 2 Q: No problem with Mr. Domi using his 3 expense account for those kinds of matters and -- and would 4 the same apply with respect to 64, which appears to record 5 dinner on the 17th of June with Paul Godfrey and Jeff Lyons? 6 A: I g -- one (1) comment I would make, just 7 for what it's worth and -- and this, I guess, follows on in 8 part from what Mr. Moore said and in part -- in part from 9 what we talked about briefly yesterday was that, I guess as a 10 result of the review of these expenses by initially Mr. Moore 11 and Mr. Berrill and latterly by Commission Counsel, in 12 particular Mr. Manes. 13 Things have come to light where -- where some 14 of the things that -- that -- that -- some of the reasons 15 that Dash recorded on his expenses weren't accurate or 16 appropriate and that's one (1) of them. Where he -- 17 Q: This one (1) here? This very one (1)? 18 A: Yeah and -- 19 Q: Oh, I didn't know that. Help me with 20 that, please. 21 A: Well, he said that wasn't who he had 22 dinner with and then what Dash has said is that he would do 23 his expenses two (2) or three (3) months after the fact and 24 could -- didn't have great record-keeping and therefore 25 sometimes put down the wrong names but he -- now, this is in

1 part anecdotal, but I did follow up with Dash after these 2 things came to light through Mr. Moore and Mr. Berrill and 3 Mr. Manes. 4 On certain expenses items and in particular 5 that one (1) and another one (1) that I spoke to Dash about 6 was the one (1) that we made reference to yesterday, which 7 was 72. 8 Q: Hmm hmm. 9 A: And there was another one (1) in the June 10 of 2001, and -- and -- and Dash has said those people just 11 weren't at those -- they weren't there. 12 Q: Okay. 13 A: So -- 14 Q: I just want to understand why you 15 identified particular dates and asked Mr. Domi specifically 16 about those. What -- what -- what peaked your interest about 17 64? 18 A: Well, 64 is the Paul Godfrey, Jeff Lyons. 19 Why would we be having dinner -- why would he be having 20 dinner with Jeff Lyons in -- in -- in -- during a blackout 21 period when Jeff Lyons is acting for a company that's 22 competing with us for the bit. 23 Q: Okay. From MFP's perspective, that would 24 be very problematic if he had done that. 25 A: It doesn't make sense. No. Similarly,

1 -- well, for the same reason when we got around to Number 72. 2 Why would be having dinner -- why would you say you had 3 dinner with Wanda Liczyk on July the 10? 4 And I guess if you look at the -- if you look 5 at the receipt, it shows there were three (3) people at the 6 dinner. It was at a Saturday -- on a Saturday night and he 7 says that wasn't -- it wasn't dinner with Wanda. Who was it? 8 I don't know who it was but it wasn't dinner with Wanda. 9 Q: Mr. Wolfraim, when you had these 10 conversations with Mr. Domi, did you have any sense that at 11 the time, that is to say in the summer June and July of 1999, 12 anybody had ever told him or instructed him that it was 13 offside to be wining and dining a City of Toronto employee or 14 representative or official during a procurement sensitive 15 period? 16 A: Absolutely. Yes. 17 Q: Who had told him that? 18 A: Well, he said he'd been told it by Irene 19 and he'd been told it by Jim Andrew. Now, why these all 20 appear this way, I mean, I -- you know, I think as I said 21 before, what we've been interested in is and told Dash about 22 is we're interested in full disclosure and we'll deal with 23 everything else in the fullness of time, so. 24 Q: So when Mr. Domi told you that, in fact, 25 these weren't true, he told you that having y -- after you

1 made it clear to him that if they were true, he'd done 2 something wrong? 3 A: I think he -- it's just, you know you've 4 done something wrong if you're saying here's an expense I 5 submitted and I was reimbursed for and the reason I gave you 6 it was incorrect and I'm admitting it's wrong. 7 Q: That's wrong but what I'm suggesting to 8 you, Mr. Wolfraim, is that when you went through these with 9 Mr. Domi, it was on the assumption, if I hear you correctly, 10 that if he'd actually -- if these receipts were true, he'd 11 also done something wrong, maybe something worse. He'd wined 12 and dined City officials during a procurement sensitive 13 period and that is offside MFP's culture and policy. 14 A: Quite apart from the discussions about 15 specific dates, he has said to me separately that he knew it 16 was offside to gi -- to entertain people from the City of 17 Toronto during the blackout period. 18 Q: And do I understand you to be telling the 19 Commissioner that you believe Mr. Domi when he says that his 20 expense accounts were submitted in error but you don't and 21 you don't doubt him, when he says he didn't wine and dine 22 City officials during this period? 23 A: I think that's -- you've got to get Mr. 24 Domi here for those questions. 25 Q: You haven't come to a firm conclusion on

1 that? 2 A: All I've said is we'll reserve judgment, 3 let's get the truth on the table to the extent we can get it 4 there and we'll deal with -- see -- you know, let's 5 facilitate the Inquiry and we'll deal with anything else in 6 the fullness of time. 7 Q: And can you tell me, Mr. Wolfraim, if 8 there have been any other examples in your company -- 9 MADAM COMMISSIONER: Maybe just before you get 10 to that next question, because I know you're thinking about 11 your next question. 12 I wouldn't mind just getting a sense from you 13 Mr. Wolfraim, I'm not sure that I have it exactly right, as 14 to when it was -- I'd like to get some understanding from 15 your perspective of when Mr. Domi thought that he should not 16 have -- or acknowledged that he knew that he should not have 17 been entertaining City people during this particular 18 sensitive period? 19 THE WITNESS: Well, he -- I guess in my 20 conversations with him, he has -- he's I haven't asked him 21 specifically when he became aware that it was something he 22 shouldn't be doing, but the impression I got was that he'd 23 always known. 24 From the time the RFP went in that he'd known 25 he was not to be entertaining City officials during the

1 blackout period. 2 And he's told me a number of times that -- 3 that he knew it both from the MFP side, and as well from the 4 City side, and he specifically identified Jim Andrew as being 5 somebody that told him that -- 6 MADAM COMMISSIONER: Did he say what Jim 7 Andrews said to him? 8 THE WITNESS: Just that any entertaining -- 9 any discussion or entertaining was not appropriate during the 10 period between the time the tenders went in and any 11 announcement was made. It was really any contact, at all. 12 So -- 13 MADAM COMMISSIONER: And did he say whether 14 Mr. Andrew told him that at that time, or is that something 15 that he knew from Mr. Andrew from before? 16 THE WITNESS: I'm -- I don't know. I guess 17 the implication from the way he described it to me, was that 18 he had known it through the period. But I -- 19 MADAM COMMISSIONER: All right. 20 Ms. Rothstein...? 21 MS. LINDA ROTHSTEIN: Thank you. 22 23 CONTINUED BY MS. LINDA ROTHSTEIN: 24 Q: Mr. Wolfraim, can you assist us as to when 25 it was that Mr. Domi told you that his practice was to put in

1 his receipts two (2) to three (3) months after they were 2 incurred? 3 A: Just last summer as we started going 4 through these things, or as these things were going through 5 and we were scratching our heads as to what -- you know -- 6 what's going on here. How come? Why is it that these aren't 7 as comprehensive or crisp as they should be? 8 Q: And if that's true that would mean that 9 Ms. Payne did not sign off on them until two (2) or three (3) 10 months after they were incurred? 11 A: I presume so, yes. It follows. 12 Q: And that would be contrary to the MFP 13 policy, would it not? 14 A: Which, sign off -- 15 Q: Signing off two (2) or three (3) months 16 after the fact? 17 A: No, why would that be? 18 Q: I thought they were to be submitted 19 monthly, sir? 20 A: Oh, it may be. If that's a policy, I 21 don't -- sure. Some people don't do them monthly. I think 22 the monthly requirement is more to just smooth the 23 accounting, the burden on the accounting department, I 24 suppose. 25 Q: Do you agree with me Mr. Wolfraim, that if

1 any of -- if it is actually true that there was any 2 entertainment of City staff during what you and I have agreed 3 was the procurement sensitive period, and let's just be clear 4 that we agree on it, May 31, all the way through to City 5 Council approval on the 27th of July, '99, is that fair? 6 A: Hmm hmm. 7 Q: You -- there's no doubt in your mind, I 8 take it from what you're telling us, that that would have 9 raised eyebrows if it had become known at the time -- 10 A: Yes -- 11 Q: -- both in your company? 12 A: Yes. 13 Q: On the street? 14 A: I presume so, yes. 15 Q: It would have certainly created 16 considerable submission -- sorry -- suspicion that the 17 process was not running as it should run fairly and squarely? 18 A: Presumably, yes. 19 Q: And it may actually have resulted in the 20 disqualification of your company as a bidder? 21 A: Well, it may -- if the City was in the 22 middle of it, then I presume that it may well have 23 permanently disqualified the whole process, they might have 24 started a whole new process. 25 I would say that would be more likely, than

1 just disqualifying an individual bidder since -- 2 Q: Would it have resulted in the firing of 3 Mr. Domi? 4 A: I don't know. You'd have to look at the 5 -- it's hard to say that -- it -- without some context. 6 Q: If all of those are true as they -- if -- 7 if what is on the paper is true, would it have resulted in 8 the firing of Mr. Domi? 9 A: Subject to a discussion or -- and some 10 context. 11 Q: And that's because if I read your code of 12 conduct correctly, sir, participation in activities, whether 13 legal or not, that are detrimental to the image of the 14 company are a violation of that code. 15 A: Yeah. What I suspect what we would have 16 done and might have -- we would have taken it to the City and 17 looked for some guidance. You know, here are the people that 18 -- that were out being entertained during this period so what 19 do you suggest we do? How do we handle it? 20 I don't think we would have fired Mr. Domi 21 before we had that conversation with the appropriate people 22 at the City. 23 Q: Now, was there a culture at MFP in the 24 spring and summer and fall -- in 1999, which put a lot of 25 pressure on sales staff to deliver business?

1 A: I don't think so. 2 Q: Would sales staff have drawn any 3 conclusions about the need to deliver business from the 4 removal of Mr. Ashbourne from the City account? 5 A: No. 6 Q: Was there a culture at MFP in 1999 and 7 2000, in which salespersons efforts to court business was 8 measured by the extent of their entertainment of prospective 9 customers? 10 A: N -- no. 11 Q: Is there any basis that any culture that 12 was rife at your company in '99 and 2000, that would have 13 reasonably led one (1) of your salespersons to conclude that 14 it was better to beef up their expense accounts to cover for 15 their lack of actual networking than to come clean? 16 A: I hope not. The other, just to qualify 17 on the pressure or -- or pressure to deliver business. When 18 we view business, we don't view volumes of business as being 19 the -- the key measure. It's the profits. 20 I mean, our sales people are paid a percentage 21 of the profit on the business they deliver so we're not a -- 22 we are not a top line volume-oriented company. We are a 23 bottom line gross-profit oriented company. 24 Q: Now, in the course of preparing for this 25 Inquiry and dealing with the issues it's thrown up, has it

1 also come to your attention, Mr. Wolfraim, that Mr. Nigro is 2 apparently going to testify that some of his expenses were 3 also in error? 4 A: Yes. 5 Q: And have you had an discussion with him 6 personally about that? 7 A: No. Oh, some of his own personal 8 expenses? 9 Q: No. That some of his MFP entertainment 10 expenses are also erroneous. 11 A: No. No, I had not heard that. No, what 12 I thought you were asking me was whether or not some of the 13 times that he appears on Dash's expense reports, he's 14 suggesting didn't happen, so. 15 Q: Is there anyone other than Mr. Domi, 16 then, that you know of at MFP who has been the subject of a 17 concern about erroneous expense account submissions? 18 MR. DAVID MOORE: Now, are we talking in 19 relation to the -- the subject matter of this Inquiry or is 20 that a general -- 21 MS. LINDA ROTHSTEIN: It's in general. 22 MR. DAVID MOORE: I mean, I know that goes 23 back to 1985 or however -- 24 MS. LINDA ROTHSTEIN: I'll start with 1999, 25 and go forward.

1 THE WITNESS: We've tightened up our expense 2 policies. 3 4 CONTINUED BY MS. LINDA ROTHSTEIN: 5 Q: What have you done, sir? 6 A: What have we done? 7 Q: Yeah. 8 A: We -- we've -- we've -- we've just added 9 -- well, I think that I've already explained previously that 10 in one (1) case we -- a number of Mr. Domi's expenses were 11 submitted without, as well as a number of other people's 12 expenses, were submitted without specific names as to who was 13 being entertained and so, we're taking -- we've added another 14 layer of due diligence and -- and -- there -- we've got 15 different management in place than was approving Mr. Domi's 16 and Mr. Nigro's expenses at the time in 1999 and -- 17 Q: What do you mean by adding another layer 18 of due diligence? 19 A: We've added a layer of -- of -- of -- of 20 review in our accounting department. 21 Q: What is that review, sir? 22 A: What is? 23 Q: I don't -- 24 A: It's just matching expenses and receipts 25 and making sure that things appear to make sense and line up

1 and -- and that sort of thing. 2 Q: So, in addition to the department head, 3 if you will, signing off on the expenses, it now goes to the 4 Accounting Department for another review? 5 A: It goes through Accounting back to the 6 department head. I've been -- given what we've been through 7 here, there's a -- there's a much greater awareness of -- of 8 -- of the whole governance issue covering expenses, so on all 9 -- on all levels -- in all levels of the organization, so. 10 Q: Mr. Wolfraim, I understood you to have 11 told the Commissioner that on the specific issue of conflict 12 of interest policies, your view is that your company ought to 13 be guided by the customer's policy; is that fair? 14 A: Yes. 15 Q: And I take it that means, sir, that you 16 agree that those who seek to do business with a customer, 17 let's call it a Government, must observe that Government's 18 conflict of interest policies? 19 A: Well, I guess the question becomes how do 20 we -- how are we to know what the conflict of interest policy 21 is. 22 Q: I'm going to suggest to you, Mr. 23 Wolfraim, that in the context of a Government, or indeed any 24 customer, the way you know is you ask? 25 A: Yeah.

1 Q: Right. 2 A: Yeah, we could ask a customer, are you -- 3 Q: You ask for a copy of the policy? 4 A: We don't do that. 5 Q: Do you agree with me, sir, that a company 6 cannot credibly say that it observes a customer's or a 7 Government's conflict of interest policy, unless it accepts 8 some responsibility to find out what the heck it is? 9 A: No, I don't agree. 10 Q: I suggest to you, Mr. Wolfraim, that if 11 you're not prepared to accept any responsibility to 12 familiarize yourself with a conflict of interest policy of 13 your customer, your statement that you're guided by their 14 policy is an empty platitude? 15 A: That's your opinion. 16 Q: I'm suggesting to you, Mr. Wolfraim, that 17 that's in fact why your sales representative, Mr. Ashbourne, 18 accepted in his cross-examination by Mr. Capern, and I will 19 take you to the evidence, sir, that it was incumbent upon him 20 to familiarize himself with the City's conflict of interest 21 guidelines, did you read his evidence on that point? 22 A: I heard some -- some evidence on that 23 point, but I -- I don't know that he -- I -- I don't know -- 24 I haven't spoken with him about it, so. I know his comment 25 was that with respect to Jim Andrew -- when I was sitting in

1 listening to his testimony, that he let Jim Andrew know he 2 had hockey tickets, and Jim Andrew, if he picked them up and 3 called the -- picked up the phone and called him, then he 4 knew that -- or he felt that -- that hockey tickets fell 5 within the purview of Jim Andrew's conflict of interest 6 policy. So I'm applying the same sort of standard. 7 I don't know -- I don't know whether Mr. 8 Capern asked what steps Mr. Ashbourne took for -- to -- to go 9 and ask Mr. Andrew for a copy of his conflict of interest 10 policy and review it. 11 Q: Well, I can take you to the full 12 transcript -- 13 MR. DAVID MOORE: Well -- well, I -- I would 14 have thought it would be more productive at the appropriate 15 time, if -- if -- if it continues to be relevant and a live 16 issue, to make submissions about that point at the end of the 17 Inquiry, rather than engage in a debate with this witness. 18 From my perspective, I -- I would submit, and 19 I'm not suggesting we have that debate now, but I think one 20 would have to read the evidence of that witness and any other 21 witness in its entirety in the full context, both examination 22 by the City, examination by myself, examination by Mr. Manes, 23 et cetera. 24 MADAM COMMISSIONER: Mr. Moore, I see this as 25 cross-examination, and I don't have any difficulty with the

1 line of questioning that Ms. Rothstein is proceeding with. 2 At the end of the day, I will be asking for 3 written and oral submissions, I expect, on the entire 4 Inquiry, and at that point I fully expect that counsel will 5 likely produce for me either charts or something that 6 indicates what one (1) witness said, what another witness 7 said, and indicates whether there's any discrepancies between 8 them. 9 Mr. Wolfraim is the President of the company. 10 I don't see any difficulty with the sort of questioning that 11 Ms. Rothstein has at this point. 12 MR. DAVID MOORE: The specific -- 13 MADAM COMMISSIONER: The -- 14 MR. DAVID MOORE: -- the specific concern I 15 have is -- is extracting a question or two (2) or three (3), 16 if that's My Friend's intention, from an examination of Mr. 17 Ashbourne that took place over a month ago, and -- and which 18 will then make it incumbent upon me, presumably, if I view -- 19 deem it appropriate or necessary, to reread Mr. Ashbourne's 20 transcript in its entirety. Perhaps in -- in further 21 examination, to bring out the full context, his -- his 22 evidence was what it was. 23 MADAM COMMISSIONER: Well -- 24 MR. DAVID MOORE: And I'll leave it at that. 25 MADAM COMMISSIONER: -- Mr. Moore, that

1 happens everyday in every Court proceeding that I've been in, 2 that either counsel cross-examine on a portion of examination 3 for discovery, or they cross-examine on a portion of a 4 preliminary inquiry transcript, without going through the 5 whole thing. 6 I think it is completely incumbent on -- as an 7 officer of the Court, for Ms. Rothstein and any other lawyer 8 to make sure that when they are quoting something from the 9 record, that they be fair about what they're quoting, and 10 that they quote the whole part that needs to be quoted. I 11 would expect that from every lawyer in the Hearing. All 12 right? 13 MR. DAVID MOORE: Thank you. 14 MADAM COMMISSIONER: Ms. Rothstein...? 15 MS. LINDA ROTHSTEIN: Thank you. 16 17 CONTINUED BY MS. LINDA ROTHSTEIN: 18 Q: Mr. Wolfraim, on the 17th of December 19 2002, at page 47, Mr. Ashbourne was asked the following 20 series of questions by Mr. Capern: 21 "Now, just going over these, I've given you 22 four (4), if I can call them broad 23 categories, Mr. Ashbourne, of these special 24 considerations, if I can call them that." 25

1 MADAM COMMISSIONER: They're December the...? 2 MS. LINDA ROTHSTEIN: December the 17th, 3 2002, Commissioner. 4 MADAM COMMISSIONER: Hmm hmm. 5 6 CONTINUED BY MS. LINDA ROTHSTEIN: 7 Q: "The first that I gave you was a Council 8 approvals of spending, the second I gave 9 you was the Purchasing By-laws and the need 10 to tender, the third I gave you was the 11 presence of conflict of interest 12 guidelines, and the fourth was the 13 protection of confidential bid information. 14 Do you agree with me, sir, that it is 15 incumbent on all persons wanting to do 16 business with the City of Toronto to know 17 and understand these by-laws and policies 18 to the best of their abilities?" 19 Answer: 20 "Yes. 21 And that would apply to MFP, sir?" 22 Answer: 23 "Yes. 24 And to all of its employees?" 25 Answer:

1 "Yes. 2 And is it your evidence, sir, that these 3 by-laws and policies were generally 4 understood by MFP and its staff at all 5 relevant times?" 6 Answers -- answer: 7 "Yes." 8 And then to be fair, when Mr. Capern went 9 further, and I will find the reference if necessary, Mr. 10 Ashbourne actually conceded that he had not indeed made any 11 attempt to get a copy of the policy or ask specifically about 12 the policy. 13 But what he appears to say at the level of 14 principle, and this is all I'm dealing with -- 15 A: Hmm hmm. 16 Q: -- at the moment, sir. He appears to 17 concede that at the level of principle, it is indeed 18 incumbent on anyone doing business with a client such as the 19 City of Toronto, to make an effort to familiarize himself or 20 herself, to the extent possible, with the City's policies, 21 such as conflict of interest. Do you disavow that approach? 22 A: I -- we've been doing business in a 23 public sector for almost twenty (20) years. I'd said before, 24 we've done business with the Federal Government, we've done 25 business with all ten (10) Provincial Governments at

1 different points in time, we've done business with fifteen 2 (15) to twenty (20) Municipalities, and another twenty-five 3 (25) to thirty (300 other public sector organizations, and we 4 have never asked anyone for a copy of their conflict of 5 interest policy. 6 And I -- and I will go away and -- and 7 reconsider that position. Obviously given -- I mean we're 8 going through a governance revolution right now, and -- and 9 that may no longer be an appropriate approach, it may be that 10 we need to be more proactive in -- in that regard. 11 Q: And it certainly -- 12 A: But in the past we've never done it and 13 we've never had an issue with it. 14 Q: -- and it certainly wouldn't be ideal, I 15 suggest to you, Mr. Wolfraim, if a salesperson at MFP is 16 setting a higher standard for himself than you do with the 17 company? 18 MADAM COMMISSIONER: I don't understand the 19 question? 20 MS. LINDA ROTHSTEIN: Mr. Ashbourne has 21 conceded that he had -- 22 MADAM COMMISSIONER: Right. 23 MS. LINDA ROTHSTEIN: -- an obligation to 24 familiarize himself as a matter of principle, which appears 25 to set a higher standard than Mr. Wolfraim is setting.

57
  1                 THE WITNESS:   No, what he -- what I'm saying
  2  is it may appropriate for us to revisit that.
  3  
  4  CONTINUED BY MS. LINDA ROTHSTEIN:
  5                 Q:   Thank you.
  6                 A:   What I'm saying is we've not done it in
  7  the past, and -- and Rob has not been that active in the
  8  public sector in the past, so I doubt he's ever done it for a
  9  private sector customer, I doubt he's ever done it for a
 10  public sector customer.
 11                 Q:   Would you take a look, Mr. Wolfraim, at
 12  Tab number 2 of Volume 3?
 13  
 14                       (BRIEF PAUSE)
 15  
 16                 Q:   And on the point of reconsidering whether
 17  there's more that may be required by those who do business
 18  with a Government such as the City of Toronto, we're looking
 19  at your letter of November 1, 2001, at 20367.
 20                 You say in the second last bullet point:
 21                   "Corporate expense regarding customer
 22                   entertainment are lawful and tax
 23                   deductible, the question is whether
 24                   customer policy is clear and adhered to. 
 25                   We are of course, guided by our customers

58
  1                   and their observance of their own policy
  2                   and would never knowingly entice or promote
  3                   contravention of such, doing so is a
  4                   fireable offence at MFP once such act
  5                   becomes known to me."
  6                 With the benefit of hindsight and the
  7  education that you've had thus far from this Inquiry, Mr.
  8  Wolfraim, do you agree that if there is no obligation to
  9  inform oneself about the policy, those who seek to do
 10  business with the City of other Governments, run the risk of
 11  being wilfully blind?
 12                 A:   You've -- can you run that one (1) by me
 13  again?
 14                 Q:   Well, I'm suggesting to you, Mr.
 15  Wolfraim, that if you are only judging yourself by what an
 16  individual employee accepts in terms of your suggestion or
 17  entertainment, if you are guided only by what an individual
 18  employee may do, you may in fact be enticing someone who has
 19  a wrong-headed view about things, and you may be in effect
 20  wilfully blind, to what -- 
 21                 A:   You -- 
 22                 Q:   -- is really required?
 23                 A:   -- you may be right.  Having said that,
 24  we're relying on twenty (20) years of experience with many,
 25  many different public sector organizations and private sector

1 organizations that have a myriad of conflict of interest 2 policies, so. 3 Q: Do you accept, Mr. Wolfraim, that the 4 level of policy that the very people who are most likely to 5 be enticed by lavish entertainment offers are those who are 6 least likely to tell you, as a potential supplier, what their 7 policy actually requires? 8 A: Well, intuitively that has merit. 9 Q: Would you turn, Mr. Wolfraim, to Volume 10 2, Tab 179, this is document number 23408, entitled: 11 "Statement by Peter Wolfraim, President and 12 CEO." 13 Can you assist me, Mr. Wolfraim, was this a 14 statement you released to the press, I'm not -- 15 A: I don't think it was. I think it was 16 related -- released at least internally, and given the date 17 here, I don't know whether -- there were a couple of times 18 that we attempted to communicate directly with City 19 Councillors by faxing in information, and this might have 20 been one (1) of the things that -- that went to them, that's 21 just going by date. 22 Q: And if we look at page number 2, under 23 relationships, you say: 24 "Relationships between MFP and City 25 officers and staff, were at all times

1 normal and professional, and characteristic 2 of normal business relationships involving 3 transactions of this nature." 4 And knowing what you know now, and accepting 5 what you, sir, accept to be true about the expenses that were 6 made in favour of City entertainment, do you think -- still 7 think that's a fair statement? 8 A: I haven't done an in depth analysis of 9 the expenses. I mean, I -- I don't know how much money was 10 spent on the City, I -- I don't know how much of -- I mean, 11 and I don't know whether I'll ever know, how much of -- for 12 example, the expenses that -- that Dash has claimed and been 13 -- been reimbursed for between -- in June and July, are -- 14 are what they're for. 15 Q: Would it be fair to say, Mr. Wolfraim, 16 that at the time that you wrote this document, you had done 17 no such investigation -- 18 A: No, we -- what we'd done is I had 19 reviewed Dash's expenses on a very high level to look at the 20 dollar amounts on -- on a monthly basis, and they appeared to 21 be in line with other sales reps who'd performed at similar 22 levels. 23 Q: And -- 24 A: And I -- in looking around again, having 25 been in the business for twenty (20) years and having watched

1 other business organizations entertain City of Toronto staff 2 and others, I didn't see anything that we were doing or had 3 done, as being unusual. 4 Q: And at the time you wrote this, you knew 5 nothing about draft procurement documents being in Mr. Domi's 6 file, I take it? 7 A: No. 8 Q: Would you turn, Mr. Wolfraim, then to 9 Volume 3, Tab 24? 10 11 (BRIEF PAUSE) 12 13 Q: This is document number 40473. 14 MR. DAVID MOORE: What was the -- the tab 15 reference again, I'm sorry? 16 MADAM COMMISSIONER: Tab 24. 17 MS. LINDA ROTHSTEIN: Volume 3, Tab 24. 18 MR. DAVID MOORE: Thank you. 19 20 CONTINUED BY MS. LINDA ROTHSTEIN: 21 Q: This, I understand, Mr. Wolfraim, is an 22 excerpt from Oracle Corporation's Code of Ethics and Business 23 Conduct, and am I right in assuming that you wouldn't have 24 looked at anything like this until we asked that these 25 documents be produced for your review and our questioning?

1 A: Yeah, that's right. 2 Q: And have you now had an opportunity to 3 review it, sir? 4 A: I have. 5 Q: And have you ever seen a Code of Conduct 6 for a supplier that reads like this? 7 A: I haven't. And I wonder, frankly, what 8 the timing of it is, because I guess Oracle's problems in the 9 public sector are pretty well known. So, I wonder whether 10 they wrote this after they got into trouble with the State of 11 Ohio and the State of California. 12 But they had an issue, I don't know whether 13 you're familiar with it, but with the State of California 14 where they made, I think fifty thousand dollars ($50,000) in 15 campaign contributions to the Governor and the Attorney 16 General, and were subsequently awarded a $100 million 17 software license deal without -- that didn't go to tender. 18 And under the same sort of enterprise license 19 agreement format that the State of Ohio had done and the City 20 of Toronto had done, but I gather the State Auditor came out 21 and said that it was about twice what they needed, and ended 22 up letting I think about seventy (70) people go. The State 23 did. So I wonder about the timing of this, that's all. 24 Q: I have no idea, I'd help you if I could. 25 But if we read from the policy, and it may be it had been

1 provoked by an unfortunate episode in that Company's history, 2 it would -- it reads as follows in the first paragraph: 3 "Dealing with Government. Oracle strictly 4 observes the laws, rules and regulations 5 which govern the acquisition of goods and 6 services by any Governmental agency of any 7 country. Activities that may be 8 appropriate when dealing with non- 9 Government customers may be improper and 10 even illegal when dealing with the 11 Government. Oracle employees who deal with 12 any Government agency are responsible for 13 learning and complying with all rules that 14 apply to acquisitions by that Governmental 15 agency." 16 And so, am I right, Mr. Wolfraim, that that -- 17 this appears to espouse a philosophy in which there is a -- 18 an obligation not only on the Government to police and 19 observe it's own policies that ensure fair play and objective 20 procurement practices, but also on all those who seek to do 21 business with that Government? 22 A: Yes, it does. 23 Q: It would appear to set up a regime of 24 mutual obligation, would it not? 25 A: Yes, it does.

64
  1                 Q:   And would you agree that at the matter of
  2  -- as a matter of policy, a regime of mutual obligation goes
  3  a little bit -- a regime of mutual obligation enhances the
  4  ability of those who watch Government to be satisfied that
  5  indeed, fair processes are at play?
  6                 A:   Well, I think it's better for all
  7  involved, frankly, ultimately it's -- 
  8                 Q:   And I take it, sir, although MFP did not
  9  have such a -- a policy at the time that these events arose
 10  or indeed today, you as part of the lessons learned from this
 11  Inquiry, would be prepared to contemplate a -- a policy of
 12  this nature?
 13                 A:   Well, I think we'd have to take a look at
 14  it.  I guess what -- we've never had a problem before, as I
 15  say, we've -- we've had twenty (20) years of experience with
 16  all levels of Government, different people handle different
 17  things different ways, different people handle their conflict
 18  of interest policies different ways, both the public sector
 19  and private sector.
 20                 So -- but certainly conflict of interest
 21  policies is something we're going to be more aware of in the
 22  future.
 23                 Q:   And are you prepared at this stage, to
 24  tell the Commissioner whether or not MFP would be opposed to
 25  operating -- or let me put it this way.

1 Are you prepared to operate in an environment 2 in which all those who wish to do business with the City of 3 Toronto, have to establish a policy along these lines? 4 A: Wish to do business with the City of 5 Toronto? I don't know that we want to do business with the 6 City of Toronto in the future, frankly. 7 Q: Are you prepared to operate in an 8 environment in which all those who seek to do business with 9 Government, would have to establish that they have a policy 10 along these lines? 11 A: Yes. I don't know that it would -- it 12 would be -- it would make sense for a government to say that, 13 and in fact, there are private sector people, as I think I've 14 said before, that will produce a conflict of interest policy 15 and have their suppliers review it and sign off on it. 16 If that was -- and I would strongly recommend 17 that's something the City of Toronto give serious 18 consideration to. 19 And we wouldn't stand in the way of that 20 because I think it clears the air and levels the playing 21 field for everybody in any situation, whether it's City of 22 Toronto or anyone else. 23 Q: Mr. Wolfraim, if you would turn to Tab 210 24 of Volume 2, please? 25

1 (BRIEF PAUSE) 2 3 MADAM COMMISSIONER: Which one is -- is that 4 that very last one? 5 MS. LINDA ROTHSTEIN: That's what I'm 6 wondering myself, but, it is -- yes, the very last document 7 in that volume. And it's document 23261. 8 9 CONTINUED BY MS. LINDA ROTHSTEIN: 10 Q: Mr. Wolfraim, you and I reviewed this 11 document yesterday, a little bit. And I understand this to 12 be, the yellow sheet, which constitutes the approval by the 13 Investment Committee of MFP of $43 million worth of funding 14 in relation -- a lot of words, not well done, let me try it 15 one (1) more time. 16 I understand this to be the yellow sheet that 17 was prepared for the Investment Committee on June the 10th, 18 1999? 19 A: Yes. 20 Q: And this was the document in which your 21 Investment Committee approved what you then believed was the 22 aggregate amount of leasing that could be won through this 23 RFQ process? 24 A: That's what we believed was the initial 25 deal. And this -- I wouldn't know that I would say, believed

1 or understood. I'm not sure what the right way is to 2 characterize it. But -- 3 Q: The best information -- 4 A: Yes -- 5 Q: -- that MFP had on June the 10th, 1999, 6 was that the City of Toronto was going to write $43 million 7 of technology leases, yes? 8 A: Within the next ninety (90) days or so. 9 Q: Within the next ninety (90) days or so and 10 that those leases would run for thirty-six (36) months? 11 A: That's right. 12 Q: That was the best information your company 13 had? 14 A: Yes. 15 Q: And at the end of July of 1999, sir, when 16 City Council in fact, approved this deal and that information 17 made its way back to your company and specifically to you, 18 what were you told that City Council had approved? 19 A: I was not told anything. What I was told 20 was that the City staff had been given instructions to 21 negotiate an agreement with MFP. 22 Q: And who were you told that by? 23 A: I was told that by Irene or Dash or 24 somebody. 25 Q: But, Irene or Dash or somebody, was surely

68
  1  charged with the job of determining exactly what it was that
  2  City Council had indeed approved?
  3                 A:  Normally, normally, people don't tell you,
  4  this is what you've been awarded or approved until the
  5  contracts are completed.  Because that's -- the concern is
  6  that if you turn around and say, MFP has just been awarded a
  7  $43 million deal, now let's negotiate the contracts, given
  8  that City Council's approved it, it could turn it into a
  9  fairly one (1) sided negotiation fairly quickly.
 10                 So, typically the way -- first of all, I
 11  believed, it was going to be a multi-vendor award.  So, when
 12  I was told that --
 13                 Q:  Where did you come to that belief from?
 14                 A:  I just assumed that was the -- that was
 15  the -- sort of the pattern that I -- I assumed this was a --
 16  what the City was really doing here was establishing a couple
 17  of leasing companies as being their preferred suppliers of
 18  lease financing.
 19                 And that is the way that deals had gone with
 20  other public sector customers and many private sector
 21  customers, where they don't get locked into one (1) supplier. 
 22                 They'll negotiate business arrangements or the
 23  agreements will be negotiated with two (2) or more suppliers,
 24  so that if every ninety (90) days, this is what we had
 25  assumed the transaction was, that every ninety (90) days we'd

1 supply new pricing and the City could chose one (1) of two 2 (2) or three (3) of us, or elect to go and get a separate 3 bid, or purchase it or do whatever they want, they cared to 4 do that quarter. 5 But, we -- I didn't believe it would be a 6 single award. And normally when tender -- when -- after any 7 confidential approval, such as the City, went through comes 8 out normally what happens is that the City will come and say 9 we've been instructed to negotiate contracts but being no 10 more specific than that but just in order to assure that the 11 contract negotiation process is even-handed, I suppose. 12 Q: Who was involved at MFP in dealing with 13 the City, not in the legal department but outside the legal 14 department, to determine what the scope of the deal was to 15 be? 16 A: Well, my guess it would have been a 17 combination of -- of Rob Wilkinson and Dash and -- and 18 possibly Sandy Pessione. 19 Q: Is there anyone else? I just want to 20 know what the list is -- 21 A: Irene would have -- 22 Q: -- so I know to ask. 23 A: Irene would have been -- I presume would 24 have been the senior person on the -- on the -- within the 25 group.

1 Q: So it would still have been within Irene 2 Payne's responsibilities to follow through and actually put 3 the deal in place contractually? 4 A: Yes. 5 Q: All right and when did you, sir, first 6 learn that there was discussion afoot, leaving it general 7 like that, to change the term of the lease from thirty-six 8 (36) months to sixty (60) months? 9 A: September. Sometime, I don't recall. 10 Q: And do you recall how you came to that 11 information? 12 A: Only that -- the contracts had been or 13 were being negotiated, the business processes were being 14 discussed with the City and the City was now talking about a 15 five (5) year transaction as opposed to -- looking at a five 16 (5) year transaction as opposed to a three (3) year 17 transaction. 18 Q: Okay and again we'd have to ask Ms. 19 Payne, Mr. Wilkinson, Mr. Domi and perhaps Mr. Pessione as to 20 what conversations took place with the City about that issue? 21 A: Yes. Yeah, I -- the one (1) exception 22 may be -- I don't know whether Mr. Pessione -- I think he 23 became less involved over time but I'm not positive. 24 Q: Okay and when, Mr. Wolfraim, did you 25 first become aware that the scope of the deal, call it the

1 magnitude of the deal, was going to go beyond $43 million? 2 A: The first time I read the RFQ. They 3 could go -- 4 Q: No, but when did you learn that there was 5 actually going to be contracts written beyond $43 million? 6 There's always a potential, but when did you 7 learn that the City was really looking at, call it, $65 8 million, in the fall, worth of leasing? 9 A: I -- I think the City was looking at from 10 the get-go, our impression was that they were looking at $75 11 to $100 million in total financing. That was our 12 understanding from just the original review of the RFQ. 13 Q: But you -- 14 A: Half software, half hardware. 15 Q: I know that, but you just told me that 16 the very best information you had on June 10 that it was $43 17 million. 18 A: Within the next ninety (90) days. 19 Q: Yeah and so when, after that ninety (90) 20 day period or during it, did you get information that it was 21 going to be considerably in excess of $43 million? 22 A: Well, it's -- what -- let me expl -- I'm 23 not explaining it properly. We assumed the overall project 24 for the City, prior to responding to the RFQ, we assumed that 25 the overall project for the City was between $75 and $100

1 million. 2 What the yellow sheet covers is a deal for the 3 next ninety (90) days. So, we expected in the next ninety 4 (90) our best information is the City may do as much as $43 5 million. Whether we get award some or all of that, we have 6 no idea but that's what we were focussed on. 7 But both before, during and after the RFQ was 8 responded, in the list of equipment in the RFQ totaled 9 somewhere between $75 and $100 million and I guess the 10 intelligence we had going back to Rob Ashbourne's discussions 11 with Jim Andrew in December of '97. 12 Jim Andrew was talking about a Y2K plan that, 13 I think, totaled $85 or $90 million. So, this was just -- 14 Q: All right. 15 A: -- this was consistent with all of those 16 discussions. 17 Q: That said, sir, was it your expectation 18 that having gone through a formal RFQ process in which there 19 was at least some contemplation of it being $43 million, that 20 anything beyond that would be outside a public tendering 21 process? 22 A: We assumed that it was going to be a 23 multi-vendor award and the way to keep your tendering going 24 was by going to two (2) or three (3) people every ninety (90) 25 days. There was never any time that the City couldn't have

1 -- the City was never compelled to do any business with 2 anybody. 3 Q: And was there some point when MFP 4 congratulated itself because it came to believe that, in 5 fact, you were going to be the only game in town? 6 A: No. 7 Q: There wasn't going to be any multi-vendor 8 award? You were getting $65 million worth of business? 9 A: No, because it -- it -- we never knew 10 that. I mean, there was never contractual requirement of any 11 sort or any kind that bound the City to dealing with us. The 12 City always had options, every quarter it had all the options 13 -- had options to go to other leasing companies or purchase 14 or do whatever. 15 Q: Mr. Wolfraim, when the City started 16 talking to MFP about changing the term of the lease from 17 thirty-six (36) months to sixty (60) months, was that 18 unusual? 19 A: It's -- it's somewhat unusual, not in the 20 never happened category, but it's somewhat unusual, yes. 21 Q: And if you had been one (1) of the losing 22 bidders in the RFQ process that had been premised on a 23 thirty-six (36) month term, and learned that the successful 24 bidder was now writing leases for sixty (60) months, would 25 you have been troubled by that?

1 A: Yeah, I would have asked the question, 2 what's going on, why don't you rebid it? 3 Q: And you would have thought that that 4 required a rebidding process? 5 A: Or at a minimum, canvassing the people 6 with the five (5) year numbers. We had no reason to believe 7 the City wasn't doing that, because we -- as I say, we 8 thought -- I understood or assumed it would be a multi-vendor 9 award, so. 10 Q: Can we look at Volume 1, Tab 58, please? 11 12 (BRIEF PAUSE) 13 14 Q: And actually -- 15 MADAM COMMISSIONER: Just before you get to 16 that, when you say, Mr. Wolfraim, that you were thinking it 17 would be a multi-vendor award, just going from memory here, 18 but my recollection was that when Mr. Balkissoon testified 19 that he had had a telephone conversation I believe, with Mr. 20 Domi, this was dealing with the photocopy award -- 21 THE WITNESS: Correct. 22 MADAM COMMISSIONER: -- but my recollection 23 is that Mr. Domi said, we've got the contract, you're not 24 supposed to be putting this out, or you're not supposed to be 25 giving it to anybody else, that we've won the contract.

1 Now, I'm just going from memory -- 2 THE WITNESS: Yeah. 3 MADAM COMMISSIONER: -- and acknowledge that 4 it was about a month ago, but that's -- at least, do you 5 remember anything like that? 6 THE WITNESS: Well, I remember -- I -- I 7 remember Mr. Balkissoon's testimony, and I remember asking 8 Dash about it, and Dash is saying he has no idea what he's 9 talking about, but that he did talk about us being 10 experienced in dealing with technology financing for the 11 City, but he doesn't recall ever saying or suggesting to the 12 Councillor that -- that we had an exclusive right to provide 13 technology financing. 14 MADAM COMMISSIONER: Okay. 15 THE WITNESS: And there's nothing in any 16 contract that ever said that. There's nothing in the RFQ 17 that said that. So that's -- I'm not sure where that comes 18 from, other than -- 19 MS. LINDA ROTHSTEIN: Mr. Wolfraim -- 20 THE WITNESS: -- the City saying it. 21 22 CONTINUED BY MS. LINDA ROTHSTEIN: 23 Q: -- you remember asking Dash about his 24 conversation with Mr. Balkissoon, when did you ask Dash about 25 his conversation with Mr. Balkissoon?

1 A: A month ago or something -- 2 Q: So it was at the time that Mr. Balkissoon 3 testified? 4 A: Yes. 5 Q: Was that the first time you'd heard that 6 there was someone at the City who was suggesting that Mr. 7 Domi had said that there was some exclusivity to MFP's deal? 8 A: Yes. 9 Q: Okay. And back to -- Commissioner, do 10 you have any more questions, or shall I -- 11 MADAM COMMISSIONER: No. Thank you. 12 MS. LINDA ROTHSTEIN: Back to -- 13 MADAM COMMISSIONER: I just thought you were 14 moving into a different area -- 15 MS. LINDA ROTHSTEIN: Well, I was. And then 16 that was helpful, so I'm -- but I'm still on track here, and 17 I'm on track in a time -- on the basis of the clock as well. 18 19 CONTINUED BY MS. LINDA ROTHSTEIN: 20 Q: Volume 1, Tab 58 please? 21 22 (BRIEF PAUSE) 23 24 Q: Mr. Wolfraim, pull up that tab, which is 25 document number 29457, but at the same time, if you can,

1 because I think we have to do it this way. Can you also pull 2 up Tab 23 of Volume 3? 3 4 (BRIEF PAUSE) 5 6 A: You're asking me to multi-task? 7 Q: Yeah, I'm asking you to multi -- multi- 8 task. 9 A: All right. 10 11 (BRIEF PAUSE) 12 13 MADAM COMMISSIONER: 36686. 14 15 CONTINUED BY MS. LINDA ROTHSTEIN: 16 Q: I've had some conversations very briefly 17 with your counsel about this, so this may have to get 18 clarified down the line, and that's fine if that's the 19 answer, but I just thought while you're here we'll try and 20 see if we can sort this out. 21 If I look at the November '99 MFP Credit 22 Committee document, which is actually the one (1) at Tab 23 23 of Volume 3 and it's 36686, for the record. 24 That appears to be the approval that was given 25 to write $65 million worth of leases, correct?

1 A: That's right. 2 Q: And at the bottom, it says, that this 3 application supercedes an earlier submission for same lessee 4 dated October '99 in the amount of $43 million? 5 A: Right. 6 Q: Let me be frank with you, Mr. Wolfraim, I 7 can't find an October '99 yellow sheet, or other Investment 8 Committee document for $43 million. What I can find is what 9 I've shown you at Tab 59 of Volume 1, document 29457, which 10 appears to be about $25 million, not quite, worth of business 11 -- or $20 million, sorry. 12 A: Right. 13 Q: And when you add that to the 43 in the 14 June -- on the June 10th, '99 document, you get close to 65. 15 Can you help me with this? 16 A: Well, I think they're different 17 committees. This is sort of apples and oranges. 18 Q: Is it? Okay. 19 A: The Credit Committee and the Investment 20 Committee are quite separate. 21 Q: Okay. Can you help us with that? 22 A: One (1) has to do with credit, which is 23 credit and to what extent we have approval levels that are 24 required for different levels of credit exposure to 25 customers.

1 And then we have an Investment Committee which 2 is -- has to do with residual investments and which is a 3 different kind of risk and there is a different process, a 4 different committee and a different approval process for -- 5 for the Investment Committee than the Credit Committee. 6 Q: To my simple mind -- 7 A: Yes -- 8 Q: -- the Investment Committee approves your 9 equity participation? 10 A: Right. 11 Q: The Credit Committee approves the actual 12 loan? 13 A: You explained it better than I did. 14 Q: Whew. Okay. 15 A: Any -- 16 Q: But, they've got to work hand in glove 17 surely? 18 A: Yes. 19 Q: Because what isn't covered by your 20 company's equity participation, has to be covered by an 21 external funder? 22 A: Right. 23 Q: Okay. So the numbers should match? 24 A: Well, we're missing a couple of deals 25 here. In November of '99, there were a couple of software

1 deals, that this -- the initial deal that was done, October 2 1st, '99 was $20.3 million. 3 The -- and I don't know what -- whether 4 there's anywhere in here that there's a schedule of other 5 deals. So that means we're $45 million away. 6 We had quoted on, I think about $30 million 7 worth of software deals in November at the City's request. 8 And I think and it might have been $35 million worth of 9 software deals. 10 I'm going from memory, so -- but, I think, so 11 that would be 20, plus 35, is 55 million. And there may well 12 have been a second piece of business, be it sale leaseback or 13 second installment on the hardware piece that was another $10 14 million that was going to close in December or January. 15 But, the software -- there was -- I think $20 16 to $25 million worth of software business closing effective 17 December the 1st. So, that would be 20, plus 20 to 25, which 18 is 40 or 45. And then there was a third software piece, 19 which is, in fact, the Oracle piece, which was -- that we'd 20 been asked to quote on in November, but didn't get done until 21 February, and we were asked to re-quote it again in January. 22 And then other hardware business. So -- 23 Q: But just going back to the document at Tab 24 23, of Volume 3, when it makes reference to an application 25 that is being -- an October '99 application in the amount of

1 $43 million that's being superceded by this one, do you know 2 where that is? 3 A: I don't know where it is. 4 Q: Okay. 5 A: We should have it. 6 Q: All right. 7 A: I don't know where it is. 8 MS. LINDA ROTHSTEIN: Commissioner, I'd be 9 obliged, if at this stage, we could take what we'd normally 10 describe as a morning recess, so I can just determine whether 11 I have anything more to ask of Mr. Wolfraim. 12 MADAM COMMISSIONER: All right. 13 MS. LINDA ROTHSTEIN: If I don't, we'll move I 14 suppose to Mr. Moore's game plan. I may or may not, but, I'd 15 like to just go through my notes to -- 16 MADAM COMMISSIONER: All right. 17 MS. LINDA ROTHSTEIN: I'm frankly content, 18 Commissioner, that if Mr. Moore can clear up some of this in 19 his examination, that at some stage, I can ask questions 20 about it down the line and then I don't need to pursue this 21 further. 22 MADAM COMMISSIONER: All right. In the 23 meantime, I note that I think it's Mr. MacKenzie here on 24 behalf of Mr. Andrew? 25 MR. HUGH MacKENZIE: Good morning.

82
  1                 MADAM COMMISSIONER:  Good morning.  Welcome.
  2                 Just to let you know here, we don't stand in
  3  addressing the Court, simply because I guess we're not a
  4  Court right now.
  5                 But, also because we need the microphones, and
  6  so just to let you know if you do have any comments to make
  7  you do it sitting through the microphones.
  8                 But we are about to go to MFP's
  9  cross-examination of Mr. Wolfraim and I note that you're
 10  here.  I just want to give you the opportunity if you want
 11  the opportunity to ask questions of Mr. Wolfraim to do it
 12  now.
 13                 I don't know if you wanted to do that, or not. 
 14  I just saw you coming in awhile ago.
 15                 MR. HUGH MacKENZIE:  I have very few
 16  questions.  And they really relate to document 61 in the
 17  second book of Mr. Wolfraim's documents.  We would be no more
 18  than five (5) minutes.
 19                 MADAM COMMISSIONER:  Okay.  So then maybe if
 20  you could speak with Mr. Pat Moore this gentlemen in front
 21  and then with Mr. David Moore, at the break, we can see about
 22  working that through, so you can ask your questions before
 23  Mr. David Moore starts.
 24                 All right.  So, we will break now until ten
 25  (10)to.

1 THE REGISTRAR: The Inquiry is in recess until 2 ten (10) to 12:00. 3 4 --- Upon recessing at 11:34 a.m. 5 6 --- Upon resuming at 11:54 p.m. 7 8 THE REGISTRAR: The Inquiry will resume. 9 Please be seated. 10 11 (BRIEF PAUSE) 12 13 MADAM COMMISSIONER: Ms. Rothstein? 14 MS. LINDA ROTHSTEIN: Madam Commissioner, I 15 have no further questions. 16 MADAM COMMISSIONER: No further questions? 17 All right. Thank you. 18 Mr. MacKenzie? Good morning. 19 MR. HUGH MacKENZIE: Good morning. 20 MADAM COMMISSIONER: Mr. MacKenzie is acting 21 for for Jim Andrew. 22 MR. HUGH MacKENZIE: Good morning, Mr. 23 Wolfraim. 24 25 CROSS-EXAMINATION BY MR. HUGH MacKENZIE:

1 Q: Mr. Wolfraim, I have very few questions 2 for you, but I -- I would like to take you to Document 161 in 3 your Volume 2. I've been calling it 61 because in my volume 4 that's what it appears to be, but -- 5 6 (BRIEF PAUSE) 7 8 MADAM COMMISSIONER: Just so you know, Mr. 9 MacKenzie, we have all of the -- all of the documents are 10 numbered through an information program and so whenever a 11 lawyer refers to a document, they refer to what we call the 12 Begdoc number. All right? 13 MR. HUGH MacKENZIE: Yes. 14 MADAM COMMISSIONER: Which, in this case, is 15 29280. 16 MR. HUGH MacKENZIE: Thank you, ma'am. I was 17 hoping I wouldn't make that mistake on the very first 18 reference but I've now done it. 19 MADAM COMMISSIONER: Well, you may not have. 20 I -- I probably didn't give you enough time to even make the 21 mistake. I was helping you in the event that you might have 22 made the mistake. 23 MR. HUGH MacKENZIE: I appreciate the help. 24 25 CONTINUED BY MR. HUGH MacKENZIE:

1 Q: The document, sir, is Begdoc 29280 and 2 this is a document that has been referred to on a number of 3 occasions. It's a document entitled Request for proposal for 4 leasing and value added services, draft 1, dated April 30, 5 '99. 6 A: Yes. 7 Q: And I understand, sir, that -- that this 8 document was obtained from Mr. Domi's files? 9