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 10th, 2003 25

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

1 TABLE OF CONTENTS 2 Page 3 IRENE PAYNE, Resumed 4 Continued Examination-in-Chief 7 5 by Mr. Ronald Manes 6 Cross-Examination by Ms. Valerie Dyer 155 7 8 Certificate of Transcript 211 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 EXHIBITS 2 No. Description Page 3 4 11 Volume 3 Binder of documents titled 160 5 "Irene Payne" Tabs 1 to 15 6 7 8 9 10 11 12 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 MADAM COMMISSIONER: Good morning. 6 Do we have a Ms. Payne? 7 MR. FRED CHENOWETH: I must say I have not 8 seen Ms. Payne yet this morning, Commissioner. 9 MADAM COMMISSIONER: Okay. 10 MR. FRED CHENOWETH: And I have not had an 11 opportunity yet to call her on the cell phone and find out 12 her whereabouts. 13 MADAM COMMISSIONER: All right. Well, why 14 don't -- I can't do anything without her, unless Mr. Capern 15 is wanting me to do something is -- 16 MR. GORDON CAPERN: Thank you Commissioner. 17 If I might, I've agreed with Commission 18 Counsel this morning that we may need to have further 19 discussion among remaining Counsel as to the order of the 20 examination -- thank you -- as to the order of the 21 examination that are going to be conducted. 22 And actually, I'd prefer to, if it's all right 23 with you, Commissioner, is have that discussion and then come 24 back and discuss it on the record, if that's fine. 25 MADAM COMMISSIONER: Okay.

6
  1                 MR. GORDON CAPERN:  It's my way of saying we
  2  haven't quite got the agreement that you'd like.
  3                 MADAM COMMISSIONER:  Okay.  Well, we know Mr.
  4  Chenoweth is last or second last.
  5                 MR. GORDON CAPERN:  Yes, that's not a matter
  6  that is in any dispute.
  7                 MADAM COMMISSIONER:  All right.   
  8                 Okay, well, why don't we take this opportunity
  9  then to let you talk about this and let me know when Ms.
 10  Payne is here or if you need me to resolve this other matter
 11  before Ms. Payne gets here, let me know and I can come back
 12  and do that.
 13                 In the meantime we'll adjourn until Ms. Payne
 14  arrives.
 15                   THE REGISTRAR:  The inquiry is adjourned.
 16  
 17  --- Upon recessing at 10:02 a.m.
 18  
 19  --- Upon resuming at 10:10 a.m.
 20  
 21                 THE REGISTRAR:  The inquiry is resumed, please
 22  be seated.
 23  
 24                   IRENE PAYNE, Resumed
 25

1 MADAM COMMISSIONER: Good morning. 2 The roads are not good today are they? 3 THE WITNESS: No, I'm sorry about that. 4 MADAM COMMISSIONER: All right. 5 Mr. Manes ...? 6 7 CONTINUED EXAMINATION-IN-CHIEF BY MR. RONALD MANES: 8 Q: Yes, thank you, Commissioner. Good 9 morning, Ms. Payne. 10 A: Good morning. 11 Q: Just some housekeeping that I'd like to 12 clarify with you, I'm sure you can help us with it. And 13 that's to explain all these extracts in Volume 3 from your 14 diary or your secretary's diary, phone messages, et cetera 15 because they're all lumped together and we've been referring 16 to them variously in the course of your examination. 17 So, I wonder if you can turn to Volume 3, and 18 just to the index which is entitled, Extracts Re: Irene 19 Payne, at Tabs 1 through 14. 20 Correct me if I'm wrong on understanding what 21 these various extracts are and -- 22 MADAM COMMISSIONER: Mr. Manes, I just want to 23 make sure you said the index? 24 MR. RONALD MANES: Yes, the index -- 25 MS. DIANA GROSKAUFAMANIS: I think you mean

1 the binder that we've given -- 2 MADAM COMMISSIONER: Oh that's -- yes, I have 3 it. 4 MR. RONALD MANES: All right. 5 6 CONTINUED BY MR. RONALD MANES: 7 Q: Extracts re: Irene Payne, Tabs 1 through 8 14, the first two (2) Tabs 1 and 2 entitled, quote: "Extracts 9 from Desk Diary" unquote for 1998, "Extracts from Desk 10 Diary", quote unquote, for 1999, those are the desk diaries 11 that were kept by your executive secretary? 12 A: Yes. 13 MADAM COMMISSIONER: Could we just get her 14 title, is she executive secretary or executive assistant? 15 THE WITNESS: Executive assistant. 16 MADAM COMMISSIONER: Thank you. 17 18 CONTINUED BY MR. RONALD MANES: 19 Q: All right. So, there's that set and the 20 next Tabs 3 and 4, extracts from quote "Quo Vadis" unquote, 21 agenda planning diary from 1998, which is Tab 3. 22 And Tab 4, extracts from quote "Quo Vadis" 23 unquote, agenda planning diary from 1999. Those are your 24 diaries? 25 A: These are my diaries, but Christine would

1 update, she managed my diary. 2 Q: So, Christine managed obviously her own 3 desk diary and she managed your diary as well? 4 A: Yes. 5 Q: But separate diaries were kept? 6 A: I assume so -- 7 Q: All right. 8 A: -- there's four (4) here. 9 MADAM COMMISSIONER: Is this something that 10 you would carry with you? 11 THE WITNESS: No, this would be on my desk. 12 MADAM COMMISSIONER: Both of them? 13 THE WITNESS: No, one (1) would be on her desk 14 -- 15 MADAM COMMISSIONER: Her desk -- 16 THE WITNESS: -- and then she would update 17 mine. She would put the information in her calendar or my 18 diary, which she managed, and then she would update mine 19 after we discussed some of the meetings. 20 MADAM COMMISSIONER: Okay. Never had this on 21 computer? 22 THE WITNESS: No, that would be a lot easier. 23 MADAM COMMISSIONER: Did you have one (1) that 24 you carried with you at all then? 25 THE WITNESS: No.

1 MADAM COMMISSIONER: No, okay. Thanks. 2 3 CONTINUED BY MR. RONALD MANES: 4 Q: It's not inevitable that every entry in 5 your diary in 1999 -- 1998 and 1999 would be -- that there 6 would be a corresponding entry in her desk diary? 7 A: She would input the information into her 8 desk diary and then update mine, sometimes before we'd 9 discuss the meeting, sometimes without discussing the 10 meeting. 11 If I was out of the office for two (2) days, 12 for instance, she'd just update my diary. 13 Q: I appreciate that, but we haven't heard 14 from her yet, but you aren't prepared to say that on every 15 occasion the entries should correspond, one (1) with the 16 other? 17 A: No, I'm not sure. 18 Q: All right. In the next part, Tabs 5, 6, 7 19 and 8, are extracts from mauve covered blue lined book or 20 black covered blue lined books, ranging from December 1998 to 21 December 14th, 1999, when you left. 22 All of those extracts from Tab 5 to Tab 8 are 23 phone message extracts. 24 A: They could be phone messages and/or 25 people that come to -- to see her regarding an issue.

1 Q: Yes. All right. 5 and 6 -- Tabs 5 and 6 2 were kept by Ms. Vivaldo -- 3 A: Yes. 4 Q: -- and 7 and 8 were kept by yourself. 5 A: No, they were kept by Christine. She 6 would come in and -- take for instance, looking at Friday, 7 August 12th in Tab 7. 8 Q: Yes. 9 A: She would write these notes down and then 10 come in and discuss them with me and then she'd -- if we -- 11 once we discussed it, she would tick it off. 12 Q: Oh, so she'd then make a corresponding 13 note in your diary -- in -- in your phone message book, as 14 well? 15 A: I didn't have a phone message book. 16 Q: Well, it your blue lined book. In your 17 black covered blue lined book. She -- she -- in other words 18 -- 19 A: Okay, which one was that? 20 Q: Well, Tab -- Tabs 5 and 6 -- 21 A: Yes. 22 Q: -- are the blue lined books kept by your 23 secretary. 24 A: Right. 25 Q: All right. Now, you're not saying that

1 every time the secretary -- I'm sorry, your executive 2 assistant made a notation in her blue lined book that she'd 3 come in and make the same notation in your blue lined book, 4 which is Tab 7 and 8? 5 6 (BRIEF PAUSE) 7 8 A: Well, this is all her writing so she may 9 have kept the two (2) books. 10 Q: Yes, I appreciate that, but -- but as in 11 the extracts from the desk diaries, you wouldn't necessarily 12 expect the same notations or corresponding notations in -- in 13 -- in two (2) sets of these books. Your -- your secretary's 14 blue lined books and your blue lined books? Tabs 5, 6, 7 and 15 8. 16 17 (BRIEF PAUSE) 18 19 A: Where does it say that two (2) of these 20 books were my books? You're referring to your books versus 21 Christine's books. 22 Q: Yes. Wh -- it doesn't say whatsoever. 23 My understanding is that this is -- from discussions with 24 you, I understand, with -- that 5 and 6, Tabs 5 and 6, were 25 your secretary's phone books and 7 and 8 were your phone

1 books? 2 A: I didn't say that they were my phone 3 books. You referred to them as my phone books. 4 Q: Well, they were on your desk. 5 A: They may be on my desk but I didn't input 6 into those books. 7 Q: All right, but -- but -- I'm -- what I'm 8 trying to get at is this, are you saying that we should 9 expect, and you expected, that the same notations in your 10 secretary's blue lined books -- in your executive assistant's 11 blue lined books, should appear in your blue lined books that 12 were kept on your desk? That there were the same entries, 13 two (2) sets of books? Is that what you're -- we should 14 expect or no? 15 A: I'm not sure. 16 Q: All right. 17 MADAM COMMISSIONER: Presumably, I think most 18 of us have sort of been there at some point or another, 19 presumably she had some that she kept on her desk and then 20 she would make sure that you had a duplicate on your desk. 21 THE WITNESS: Yes. 22 MADAM COMMISSIONER: So that if you needed to 23 look at something, you'd know what you were going to be 24 facing that day or if you had to make your own appointment, 25 you could do it. If you'd have a duplicate, you wouldn't

1 have to ask her. 2 THE WITNESS: Yeah. My recollection of it is 3 that she would come in in the morning, would go through all 4 of the issues in the book. So she would then go and update 5 the c -- the diaries as -- as soon as possible, as well as 6 get back to people with issues. 7 So we -- we could be discussing an issue. I m 8 -- maybe not transfer it into the book that was on my desk 9 and we would discuss it and then she would then refer back to 10 the individual with the answer. 11 MR. RONALD MANES: Now, what is she -- what 12 -- 13 THE WITNESS: So that's probably why they're 14 not always the same. 15 MR. FRED CHENOWETH: What book does that 16 refer to, however? Does that refer to the diaries or does 17 that refer to the notes? I mean, she may -- it may be useful 18 to clarify whether they discussed matters in the diaries and 19 adjusted the diaries or whether they also discussed or didn't 20 discuss matters in the books and refresh those documents? 21 MADAM COMMISSIONER: That's helpful, Mr. 22 Chenoweth. Yes. Can you go through that, can you explain 23 that for us? 24 THE WITNESS: Okay. What we would do, we'd 25 meet it in the morning, we'd go through -- obviously read and

1 we'd go through the diary and the book. And then she 2 would -- 3 MR. RONALD MANES: And what book is that? 4 MR. FRED CHENOWETH: 5 and 6, one assumes. 5 MADAM COMMISSIONER: You mean the blue lined 6 book? 7 THE WITNESS: Yes. 8 MADAM COMMISSIONER: Okay. Yes? 9 THE WITNESS: So, we'd update -- we'd go 10 through the issues, I'm actually not sure why she would get 11 the two (2) after looking this, it's kind of confusing. 12 Probably we should have got the one (1) book and we'd update 13 it then and then update the calendar or the diary. 14 But my recollection of it is, she would come 15 in, we'd discuss the issue, she would get back to the people 16 and if there as a meeting to be scheduled, she would schedule 17 it in the diary. 18 19 CONTINUED BY MR. RONALD MANES: 20 Q: And presumably in both her diary and your 21 diary? 22 A: Yes. 23 MR. FRED CHENOWETH: If it was to be 24 scheduled. I just want to assume if it wasn't to be 25 scheduled, it wasn't scheduled, although it might have

1 appeared originally in her diary, being the assistant's 2 diary, after discussions it may not have got as far as Ms. 3 Payne's diary. 4 MADAM COMMISSIONER: Mr. Chenoweth, I 5 understood her to say, if there was a meeting to be scheduled 6 then the executive assistant would update both diaries. 7 That's what she just said. 8 MR. DAVID MOORE: Can I inject, in fairness to 9 the witness -- 10 MADAM COMMISSIONER: Hang on, Mr. Chenoweth, 11 is still -- 12 MR. FRED CHENOWETH: Which might mean that 13 there may be an entry in the assistant's diary that led to a 14 discussion with Ms. Payne and therefore an entry was 15 thereafter not made in Ms. Payne's diary because it was not 16 concluded as a result of discussions that that meeting would 17 go ahead. 18 MR. RONALD MANES: I think that by Counsel 19 offering these observations, it's not making it any clearer, 20 since I think the only people that know the actual process, 21 rather than deductions are the witness and Ms. Vivaldo. 22 And if there's any critical question that 23 comes up out of this then obviously we'll have to hear from 24 Ms. Vivaldo if there's any ambiguity, but I think in terms of 25 the process, only the witness and Ms. Vivaldo can help us.

1 MADAM COMMISSIONER: Well, as I understood Ms. 2 Payne to say, her recollection was that she would come in in 3 the morning, they'd go through all of this and then her 4 executive assistant would get back to various people and she 5 said, if there was a meeting to be scheduled, she, being the 6 executive assistant, would then update both diaries, right? 7 THE WITNESS: That's right. 8 MADAM COMMISSIONER: Okay. 9 MR. DAVID MOORE: In fairness to everybody 10 here, I don't believe the witness has seen the original 11 books. I would have brought them this morning had I known 12 this was going to be some source of confusion. 13 I'm the one who pulled them together, provided 14 the originals, plus the extracts to Commission Counsel, then 15 the originals were returned to me. 16 I'll bring the originals, I don't know if I 17 can get them here this afternoon, or not, but if not, it 18 looks like this witness will be here on Monday, I'll bring it 19 in then. 20 And that -- physically when you see them, it - 21 - it sheds some light on what-- 22 MADAM COMMISSIONER: Okay -- 23 MR. DAVID MOORE: -- I'm trying to reconstruct 24 how these books work. At least I think it may. 25 MADAM COMMISSIONER: Okay. Thank you Mr.

1 Moore. That would be helpful. 2 All right. Mr. Manes...? 3 MR. RONALD MANES: Now, with some trepidation. 4 5 CONTINUED BY MR. RONALD MANES: 6 Q: May I take you to Tab 9 to 14. And these 7 are extracts from Hilroy books from November 1998 to December 8 20th, 1999, and then there's another extract from typed loose 9 pages, Tab 14, September 1998 to October 1998. 10 All of those extracts, Tabs 9 to 14, as I 11 understand it, are extracts from notebooks that were kept by 12 your executive assistant? 13 14 (BRIEF PAUSE) 15 16 A: Yes. 17 Q: All right. Now, let me just understand 18 what we have here, in terms of Tabs 1 through 14, which 19 comprise the entirety of Exhibit number 3, provided by -- by 20 Mr. Dave Moore. 21 Is it your evidence that all of these 22 exhibits, diaries, phone books, notebooks, that those were 23 all in effect, kept by your executive assistant? That is, 24 she was responsible for all of the notations in there? 25 A: Yes.

1 Q: All right. Now, did you have -- did you 2 keep any diary of your own? 3 A: No. 4 Q: Did you keep any book where you'd note 5 phone notations, did you keep that -- 6 A: No. 7 Q: -- of your own? Did you have any 8 notebook where you would keep things you had to do, 9 organizing the day, things like that, or things that you 10 wanted to remember, et cetera -- 11 A: No. 12 Q: -- the kind of organizers that we 13 normally keep? 14 A: No. 15 Q: No. And did you -- did you -- when I 16 say keep, I'm including not only hard copy, but perhaps in -- 17 in your organizer or whatever in your computer? 18 A: No. 19 Q: Did you have a program that -- that 20 enabled you to -- to keep those kinds of records? 21 A: No, we were actually not that automated, 22 from that point of view. 23 Q: All right. 24 A: It was a manual system. 25 Q: So your days, the notations regarding

1 your days, et cetera, were exclusively by your executive 2 assistant, Ms. Vivaldo? 3 A: That's right. 4 Q: All right. Now I'll then go on if that 5 makes anything clearer, I'll go on with the other part of the 6 examination, subject to hearing what we hear after Mr. Moore 7 produces the original. 8 Would you go back, Ms. Payne, to Volume number 9 1, where we left off? 10 11 (BRIEF PAUSE) 12 13 Q: And I'm taking you back to these letters 14 involving the hiring and -- and firing of Mr. Lyons on behalf 15 of MFP, and I'm at Tab number 7, if you recall that's the 16 first letter, March the 11th. 17 That's from Mr. Lyons to yourself, and if you 18 recall, it's in that letter that Mr. Lyons says, I have 19 disclosed to you that we act for Dell Computer Corporation, 20 which includes Dell Financial Services Corp., you remember we 21 went through that -- 22 A: Yes. 23 Q: -- yesterday? And you said yesterday, 24 that -- in response to my questions, that you looked at this 25 letter just a little while ago, and you didn't really

1 remember the fact that he included Mr. -- meaning Mr. Lyons 2 included Dell Financial Services in this letter. I knew he 3 was working with Dell Computers. 4 I take it what you were saying is that when 5 you received this letter, that long ago, March 11th, 1999 or 6 thereafter, and then responded, you didn't see that he had 7 disclosed to you that he was acting for Dell Computer 8 Corporation, which in his words, quote: 9 "Included -- includes Dell Financial 10 Services." 11 A: That's right. 12 Q: All right. And so that when you sent the 13 next letter on this -- on -- at Tab 6, to Mr. Lyons, March 14 16th, 1999, confirming his retainer, you confirmed his 15 retainer without appreciating that he was going to continue 16 to act on behalf of and consult with your competitor, Dell 17 Financial Services? 18 A: That's right. 19 Q: All right. And then as I recall your 20 evidence that it was that through Mr. Domi you find out that 21 in or about May 26th or a few days before that, that indeed, 22 Mr. Lyons is acting on behalf of Dell Financial Services, 23 your competitor, and in particular, with respect to the City 24 bid? 25 A: Yes.

1 Q: And then at that point you did not 2 appreciate that he had disclosed his intention to act on 3 behalf of Dell Financial Services, back in March of 1999? 4 A: That's right. 5 Q: So when you wrote this letter dated May 6 26th, 1999, which is Tab 5, 40451, expressing your 7 disappointment, and your understanding -- 8 MR. FRED CHENOWETH: She said, Madam 9 Commissioner, that her evidence has been that she didn't 10 write the letter. And I -- I think to characterize it that 11 she did is -- is -- is not wholly accurate. 12 MR. RONALD MANES: I'll rephrase that. 13 MADAM COMMISSIONER: Okay, thank you. 14 15 CONTINUED BY MR. RONALD MANES: 16 Q: When you had this letter sent under your 17 signature, expressing your total disappointment with his 18 actions, it was -- and unprofessional conduct, it was without 19 appreciating the fact that he had made disclosure to you 20 about Dell Financial Corporation back in March of 1999? 21 A: Yes. 22 Q: And I think you -- you further said that 23 -- that you were not -- that you're sure that you were 24 informed of the content of this May 26th, '99 letter, but, 25 quote:

23
  1                   "I may not have read it in detail."
  2                 Do you recall whether Mr. Rollock -- let me
  3  just ask this -- this question this way.  Firstly, let me
  4  confirm, was it Mr. Rollock who composed this letter?
  5                 A:   Yes.
  6                 Q:   Did Mr. Rollock compose this letter with
  7  your assistance or are these all Mr. Rollock's words?
  8                 A:   Mr. Rollock composed this after we had
  9  discussed it.  So he composed it, they're his words, but we'd
 10  obviously discussed it, because he said, you know, we believe
 11  that Jeff Lyons is supporting Dell Financial on this
 12  situation, so there's probably a conversation -- I would
 13  think there would be a conversation between myself, Dash and
 14  John, and potentially Christine.
 15                 Q:   This letter goes under your name;
 16  correct?
 17                 A:   Yes.
 18                 Q:   And I take it that when you sent this
 19  letter you understood, and had -- and had been informed of
 20  the contents of the letter?
 21                 A:   I left -- well I was gone that evening
 22  around six o'clock.  I'm not sure whether I had the final
 23  version of the letter.  I would assume, based on John's
 24  expertise and his capability, I would have left it in his
 25  hands, capable hands --

1 Q: Yes. 2 A: -- to get the letter out. 3 Q: And you would have had -- you would have 4 had discussions with John at least? 5 A: John, Dash, and potentially Christine. 6 Q: All right, but those discussions would 7 have included the fact that -- that you, meaning MFP, take 8 the matter very seriously? 9 A: Yes. 10 Q: It would have included that -- that MFP 11 and you were prepared to take whatever actions that you 12 deemed necessary to prevent any financial harm that may 13 accrue to MFP, threat of a lawsuit? 14 A: No. 15 Q: That was his -- that was Mr. Rollock's 16 idea, not yours? 17 A: No, I don't even think it was John 18 Rollock's idea, I think our intention was to just tell him 19 that we -- we weren't comfortable with this situation. I 20 don't think we -- we were -- our intent was to go to the 21 extent of a lawsuit. 22 Q: Well, then what is -- you say Mr. Rollock 23 was very capable in his -- a very capable person: 24 "We are prepared to take whatever actions 25 we deem necessary to prevent any financial

1 harm that may accrue to us from your 2 actions." 3 Isn't that an implicit threat of a lawsuit? 4 A: Yes, it reads that way, but our intention 5 was not that. 6 Q: "We also consider that a professional of 7 your standing within the legal community of 8 Ontario would consider your actions in 9 appropriate and beneath the standards of 10 the Law Society." 11 Did you have discussions about making that 12 statement in the letter? 13 A: No. 14 Q: So, that would be Mr. Rollock's idea to 15 introduce this sense of a lack of professionalism and the 16 standard of the Law Society in the letter? 17 A: Yes. 18 Q: Now, having regard to the fact that you 19 now know that -- in your recent review that Mr. Lyons did 20 disclose to you that he was going to continue to act on 21 behalf of Dell Financial Services and disclosed that to you 22 March 11th, 1999, in your letter, do you regret the 23 statements? 24 A: Yes, I think it's fairly harsh. 25 Q: Now, then Mr. Lyons wrote to you back, go

1 to Tab -- 40445, and he explains his position and he says in 2 the third paragraph: 3 "I'm attaching a copy of a file copy of my 4 correspondence dated March 11th, 1999, and 5 you will note in the first paragraph, 6 quote: I have also disclosed to you that we 7 act for Dell Computer Corporation, which 8 includes Dell Financial Services." 9 Now, firstly, let me understand, did you read 10 this letter, dated May 27th, 1999, from Mr. Lyons responding 11 to the letter that dated May 26th, comma, 1999, that went out 12 on your -- under your name? 13 A: I'm not sure. I probably would have read 14 it. 15 Q: It's addressed to Ms. Irene Payne, Senior 16 Vice President Sales and Marketing? 17 A: Yes. 18 Q: If I suggest to you that letters of this 19 nature marked personal and confidential would be brought to 20 you -- brought to your attention -- 21 A: Yes -- 22 Q: -- by your executive assistance, you would 23 agree that that would be the normal process? 24 A: Yes. 25 Q: All right. Then at that point, you would

1 have appreciated what you -- now testified that you now 2 appreciate as of a few days ago that Mr. Lyons had disclosed 3 to you, at March 11th, 1999, that he was going to continue to 4 act for Dell Computer Corporation, which includes Dell 5 Financial Services, quote unquote. 6 Correct, you would have known that, at that 7 point? 8 A: Yes. 9 Q: You would have known at that point, that 10 what you had said under your name in the May 26th, 1999 11 letter at Tab 5, 405 -- 40451, was wrong? 12 A: Yes. 13 Q: And at the end of this letter, 40446, Tab 14 4, May 27th, 1999, from Mr. Lyons he says: 15 "In any event, I'm always prepared to 16 dialogue further it would help to 17 ameliorate your concerns." 18 And that's in conclusion to his -- his 19 previous paragraph: 20 "It was unfortunate that we did not have 21 the opportunity to discuss this matter 22 further as it would have been resolved 23 amicably." 24 Now, did you ever take that opportunity to 25 speak with Mr. Lyons about his response to the May 27th, 1999

1 letter, and the fact that your observations or under your 2 name in the May 26th, 1999 letter were wrong? 3 A: No. 4 Q: Can you provide us with a reason why you 5 would not respond under these circumstances? 6 A: To -- 7 Q: And try to dialogue and resolve amicably, 8 to use Mr. Lyons words? 9 A: I would think it was probably because on 10 the 27th I was out of the country. I was in -- I was there 11 for four (4) or five (5) days, got back, didn't see it as a 12 priority, quite frankly, to phone him and -- and discuss it. 13 Q: You didn't see it as a priority, might I 14 suggest, because you were always questionable or cynical 15 about using a lobbyist in the first place? 16 A: No, I think it was just -- you know, 17 there's a hundred (100) other things that were more 18 important. 19 Q: So the fact that you really didn't think 20 much of the use of lobbyists did not enter into your decision 21 not to try to resolve this with Mr. Lyons amicably? 22 A: No and actually, normally, I would phone 23 and just discuss the letter with him but I don't have any 24 recollection of -- of phoning him and discussing with him. I 25 think it's just a -- a time where there was a lot on the go.

1 Q: Did it have anything to do with Mr. 2 Lyons' performance? That you weren't ha -- at all happy or 3 impressed with Mr. Lyons' performance as a lobbyist on behalf 4 of MFP? 5 A: Mr. Lyons is a very capable individual. 6 I -- it was nothing against him, personally, it's just that I 7 didn't feel, as I mentioned yesterday, that it -- I didn't 8 see the real need for lobbyists in the first place. 9 When I didn't see any results, I -- I didn't 10 make it a priority to get back to him and discuss it -- 11 discuss either letter. 12 Q: And I guess that's the answer to my 13 question. You didn't see any results from Mr. Lyons? 14 A: No. 15 Q: All right and you didn't see, at that 16 point, any justification for having a lobbyist after having 17 the experience you had with Mr. Lyons? 18 A: At that time I didn't see -- 19 Q: All right. 20 A: -- any benefit. 21 Q: Now, obviously something must have 22 changed dramatically between that time -- that's May 27, 1999 23 and September 10, 1999, when you wrote to Mr. Lyons at Tab 3, 24 40443 and, in effect told him you wanted to hire him again? 25 A: Basically, let's give it another try.

1 Hal Shaw who was at one (1) of the golf tournaments with me, 2 was one (1) of the senior reps. He was working on a number 3 of provincial accounts. Hal felt maybe we should bring him 4 in to some of those provincial accounts. Keeping in mind, 5 the whole point of hiring him in the first place was to work 6 with him on all levels of government. 7 Q: Including provincial accounts? 8 A: Yes. So, it -- it -- the rep would see a 9 requirement, whether it's Hal Shaw, John Rollock, Dash Domi, 10 Don Ross. These reps would see a requirement for bringing 11 him in to the -- to an opportunity then. I would think it 12 had been -- the reason for me bringing him back in was 13 provoked by one (1) of the reps feeling that they -- that he 14 could help in a situation. 15 Q: Th -- this is in a context though and -- 16 and help me if I'm puzzled, that not only were you cynical 17 about the use of lobbyists but you were not impressed with 18 Mr. Lyons' performance and in fact, had written him a letter 19 under your -- under your name, in any event, calling him 20 unprofessional. 21 MR. DAVID MOORE: W -- well the witness said, 22 about five (5) minutes ago that the -- the issue of the 23 termination had nothing to do with Mr. Lyons performance and 24 in fairness, it's Mr. Lyons in the letter writing back, 25 perhaps understandably, in response to a fairly aggressive

1 letter on May 26th that he received, he's saying it's 2 appropriate to terminate the relationship and as I said, the 3 witness just testified not five (5) minutes ago that that 4 termination had nothing whatsoever to do with performance. 5 So -- 6 MADAM COMMISSIONER: Mr. Moore, is -- I 7 guess I'm sort of looking behind you at Mr. Chenoweth, and I 8 gather he is acting for Ms. Payne. 9 MR. FRED CHENOWETH: I -- 10 MR. DAVID MOORE: Well, he is, but -- but -- 11 but I'm acting for MFP, and these questions affect MFP's 12 interests, at least I perceive they do. You know, I can tell 13 you that -- that I have not known in advance, any of the 14 details of My Friend's intended questioning of this witness, 15 but now that I hear what it is, they affect not only Ms. 16 Payne's interests, but my client's ongoing interests. 17 And I'm not trying to jump in for Mr. 18 Chenoweth's place, but I mean the record is the record, and 19 to suggest -- you have my -- my point, and I'll leave it at 20 that. 21 MR. FRED CHENOWETH: I must say, I -- I've 22 been chewing on another point that strikes me with respect to 23 this line of questioning, is that we have -- we -- we covered 24 this line yesterday, and virtually the same questions were 25 asked yesterday, and we already have Ms. Payne's answer

1 yesterday on why she chose, as a result of a meeting at a 2 golf tournament and -- and an expression by Mr. Lyons as to 3 what he could achieve for them at that juncture, why she 4 chose to rehire him, and it strikes me as a little unusual to 5 -- to -- to -- to require this witness to be -- to answer the 6 same questions, in essence, a second time this morning. 7 MADAM COMMISSIONER: Mr. Manes...? 8 MR. RONALD MANES: Well, firstly with respect 9 to My Friend Mr. Moore's observations that he did not know my 10 questions in advance, I would adopt Mr. Capern's view of 11 that. Mr. Moore, nor any counsel here would expect to have a 12 transcript of what the questions were going to be asked in 13 advance. 14 But my deeper concern is the fact that these 15 questions are obvious questions that arose out of the 16 documents which Mr. Moore produced, and which have been 17 discussed with Mr. Moore at some length, and with -- and with 18 Ms. Payne. There are no surprises here, whatsoever. 19 Now, a particular question and the way it's 20 put -- 21 MADAM COMMISSIONER: Why don't -- 22 MR. RONALD MANES: -- may cause someone -- 23 MADAM COMMISSIONER: -- why don't -- Mr. 24 Manes, what would be more helpful to me actually, is to not 25 have this debate with you and Mr. Moore, but to hear your

1 response to Mr. Chenoweth, about repeating some of the same 2 evidence that we did hear yesterday? 3 MR. RONALD MANES: The witness should have an 4 opportunity to explain her evidence yesterday, and have the 5 opportunity to explain what I am suggesting may be an 6 inconsistency, and having a hard attitude towards Mr. Lyons, 7 a few months prior to hiring him with the letter that I was 8 going to go into, that is very optimistic about the future of 9 their relationship. 10 MADAM COMMISSIONER: Okay. I think maybe 11 what happened is maybe Mr. Chenoweth should have objected a 12 little earlier on, because it seems that now we are moving 13 into an area that wasn't covered yesterday, in any event. 14 And I didn't hear anything yesterday, that I recall, about 15 the meeting with Hal Shaw at the golf tournament, or maybe I 16 did and I just blocked it out already. 17 MR. FRED CHENOWETH: I didn't -- I didn't 18 hear about Hal Shaw -- and I did not hear about Hal Shaw 19 yesterday -- 20 MADAM COMMISSIONER: Yes. 21 MR. FRED CHENOWETH: -- you're right. 22 MADAM COMMISSIONER: And that's where we seem 23 to be now. 24 MR. FRED CHENOWETH: Well we can go onto Hal 25 Shaw I suppose, but clearly it's -- clearly the point is the

1 question was asked and an answer was given -- 2 MADAM COMMISSIONER: Yes. 3 MR. FRED CHENOWETH: -- as to why she chose 4 to rehire him on that day, and it strikes me as an unusual 5 practice to again cross-examine the witness on exactly the 6 same evidence. 7 MADAM COMMISSIONER: Well, I don't have -- I 8 think Mr. -- what I understood Mr. Manes to be saying is that 9 he's been trying to be fair to her, to give her an 10 opportunity to explain what appears to be an inconsistency. 11 So, I don't have a problem with that, in helping her to -- 12 and she's nodding, so I would assume she would like the 13 opportunity as well. 14 MR. FRED CHENOWETH: Well, I -- I don't 15 think -- 16 MADAM COMMISSIONER: Why don't we just move 17 on. 18 MR. FRED CHENOWETH: I'm quite content to do 19 so, but I -- I wish to make the point that I don't take it 20 that -- that she's requesting any opportunity, or we would 21 have formally done so this morning, to explain an 22 inconsistency. 23 MADAM COMMISSIONER: I didn't say that, I 24 said -- 25 MR. FRED CHENOWETH: -- yeah.

1 MADAM COMMISSIONER: -- that what I took was 2 that Mr. Manes was giving her that opportunity -- 3 MR. FRED CHENOWETH: Well -- 4 MADAM COMMISSIONER: -- to explain what he 5 saw an inconsistency. 6 MR. FRED CHENOWETH: I -- I -- I would 7 characterize it otherwise, I don't think he's doing so, I 8 think he's taking the opportunity to re-cross-examine her on 9 exactly the same point, which is my characterization -- 10 MADAM COMMISSIONER: I don't see Mr. Manes as 11 cross-examining, but anyway, let's move on and if you have a 12 problem with the next questions that come up, let me know. 13 MR. FRED CHENOWETH: Thank you, Madam 14 Commissioner -- 15 MADAM COMMISSIONER: Okay. 16 MR. FRED CHENOWETH: -- thank you. 17 MADAM COMMISSIONER: Thank you. All right, 18 Mr. Manes...? 19 20 CONTINUED BY MR. RONALD MANES: 21 Q: The reason I -- I asked these questions 22 in -- in this context, was a reference to the second line in 23 your -- in your letter to Mr. Lyons, this is September 10th, 24 1999, Tab 3, 40443, where you say quote: 25 "I know your assistance will definitely

1 help MFP achieve its business objectives 2 and I am pleased that we sorted out all the 3 details." 4 Why is it -- can you explain why you had a 5 hard attitude toward Mr. Lyon's performance and ability to 6 assist MFP a few months early, and then you have now formed 7 the opinion here, that you know that his assistance will 8 definitely help MFP achieve it's business objectives? Why 9 the change? 10 A: The change being there must have been an 11 opportunity that we discussed at the golf tournament, i.e. 12 one of the provincial opportunities that we discussed and 13 there seemed to be an opportunity to work with him because he 14 may have added some value in -- or some content that would 15 help us. 16 Keeping in mind, as I mentioned earlier, that 17 at the beginning of the relationship I wasn't totally sold on 18 the fact that we needed to work with lobbyists. 19 We started working with this individual. The 20 letter I sent or I had written, was sent out -- maybe I 21 scanned it, but I hadn't gone into it in detail, was sent out 22 to the client which was harsh -- more harsh that I would 23 normally send. 24 My personality is not that way. So, the 25 letter went out, he responded, we terminated the agreement.

1 And one (1) thing you should know about our industry, we are 2 -- when we're working with computer vendors other industries 3 whatever, there are times when you don't see eye to eye. 4 And in that case, obviously we were pretty 5 upset. The fact is, you get on with life. You have to make 6 this happen. 7 If he could have assisted us in another 8 opportunity, so be it. So, that's probably my explanation 9 for the September 10th letter. 10 Q: Did you have any discussions with Mr. 11 Wolfraim about rehiring Mr. Lyons? 12 A: I would think so. 13 Q: It was originally discussions that you had 14 with Mr. Domi, as I understand it, that led -- and 15 information received from him that led to that harsh letter 16 to Mr. Lyons? 17 A: Yes. 18 Q: Did you have any discussions with Mr. Domi 19 about rehiring Mr. Lyons? 20 A: Not necessarily. 21 Q: Well, when you said previously that you -- 22 just in your evidence previously, that if other sales 23 representatives, if Mr. Lyons could be of assistance to other 24 sales representatives, then you definitely wanted to take 25 advantage of that opportunity. Mr. Domi was one (1) of those

1 sales representatives. 2 A: Yes, but whether we had discussed it that 3 we were rehiring him, I'm not sure. 4 Q: All right. 5 A: The way we worked at MFP as a sales team, 6 is really as a team. I wasn't dictating to them how they had 7 to do their business. They would ask for certain -- certain 8 support. 9 They would ask for additional added value 10 services that consultants would provide. And if I felt it 11 was appropriate to support them, I would. 12 Q: The last line of this letter says: 13 "Jeff I look forward to a mutually 14 beneficial work relationship with you for a 15 long time. Please enjoy the small token I 16 have sent your way." 17 What was the small token you sent his way? 18 A: I was a small globe, I think? 19 MADAM COMMISSIONER: Globe? 20 THE WITNESS: Sorry, globe. A small globe 21 for his desk, which was -- we had a modeling group within MFP 22 in which Janis -- Janis Cowie would inventory trinkets. So 23 we took it from that. I'm pretty confident it was a globe. 24 25 CONTINUED BY MR. RONALD MANES:

1 Q: It appears to me that -- that this letter 2 of September 10th, 1999, Tab 3, 40443, is almost entirely 3 opposite of your previous letter, as harsh as the previous 4 letter was, that's as nice as inviting as this letter is? 5 A: This is more my style. 6 Q: At this point, you obviously look at Mr. 7 Lyons' assistance as a definite help to MFP to achieve its 8 business objectives and you look to a working relationship 9 for a long time? Correct? 10 A: Yes. 11 Q: And then you send him -- you even send 12 him a token of your feelings? 13 A: Yes. 14 Q: Had Mr. Lyons -- 15 MADAM COMMISSIONER: I guess -- I'm not sure 16 it would be feelings but -- 17 MR. RONALD MANES: A token that you were 18 feeling -- sorry. I didn't mean -- a token of -- of the way 19 you felt about -- about that long term relationship 20 professionally, correct? 21 THE WITNESS: Yes. 22 MR. RONALD MANES: All right. 23 24 CONTINUED BY MR. RONALD MANES: 25 Q: Had Mr. Lyons assisted MFP in any way

1 between May 27, 1999 and April -- and September 10, 1999 to 2 account for your change and MFP's change in attitude towards 3 Mr. Lyons? 4 A: Not to my knowledge. 5 6 (BRIEF PAUSE) 7 8 Q: There is an allegation here that we're 9 going to hear evidence upon in the -- in the Inquiry that Mr. 10 Lyons was involved in a bribe and, in particular, that we 11 anticipate the witness will -- will say that if DFS, Dell 12 Financial Services, was not interested, MFP would be 13 interested. 14 Did Mr. Lyons ever, to your knowledge, offer 15 something in the nature of a bribe to MFP? 16 A: No. 17 18 (BRIEF PAUSE) 19 20 Q: Let me go on then to the next part of my 21 questions to you and those have to do with Mr. Domi's 22 expenses. Now you've explained the process by which Mr. 23 Domi's expenses would be approved and that process included 24 an approval by, I take it Mr. Rollock -- 25 A: Yeah.

1 Q: -- the sales manager and a sign off on -- 2 on the -- those expenses? Then a review by your executive 3 assistant, Ms. Vivaldo? 4 A: Yes. 5 Q: And then she would bring those expenses 6 to you and point out if there was anything that made her 7 uncomfortable or -- or, I think your word was extraordinary 8 or out of the ordinary course? 9 A: Yes. 10 Q: That would be the process? And when you 11 -- when she would bring you those monthly expenses, I take it 12 that you would at least have a quick look at what MFP's money 13 was being spent on? 14 A: I didn't go into any detail. 15 Q: I'm not talking about detail. I'm just 16 talking about due diligence. I take it you would -- you 17 would have gone -- to some extent, gone through the expenses 18 quickly to see what MFP's money was being spent on? 19 A: No. 20 Q: So am I to take it that you would not, in 21 any review, have done anything other than look to see whether 22 there was a sign off by Mr. Rollock and if your executive 23 assistant did not point out anything that concerned her, you 24 would just sign? 25 A: I would probably scan the front page,

1 just from the point of view of dollar value, any big numbers. 2 But I -- Christine was very, very, as you can see from the 3 books that she kept, very detail orientated, and I relied on 4 her to go through those, because you have to remember I had 5 -- well, you can se by my calendars, very hectic days from 6 7:00 in the morning until 9:00 at night. 7 I relied on the resources that were working 8 with me to make sure that they supported doing the right 9 thing for the company. 10 Q: Did Ms. Vivaldo ever point out anything 11 to you, in all the time that -- that Mr. Domi and yourself 12 were at MFP, point out anything to you in Mr. Domi's expense 13 -- expense accounts that caused her concern enough to bring 14 it to your attention? 15 A: No. 16 Q: Have you had an opportunity in 17 preparation for coming here, to review the break down that 18 Commission Counsel has prepared of Mr. Domi's expenses for 19 the period of time especially that -- that you were there? 20 A: I've reviewed it the night before last 21 briefly. 22 Q: All right. 23 24 (BRIEF PAUSE) 25

1 MR. RONALD MANES: If I might just have a 2 moment. 3 4 (BRIEF PAUSE) 5 6 CONTINUED BY MR. RONALD MANES: 7 Q: Could I take you to Volume 2, at Tab 45, 8 Expense Summary, Dash Domi, prepared by Commission Counsel? 9 10 (BRIEF PAUSE) 11 12 Q: When you say you went all through this, 13 did you go through this just for the -- the -- up to the 14 period of time where you left, or did you go through the 15 whole document, with respect to -- 16 A: I looked at the -- at the whole document, 17 but spent more time on -- until I left. 18 Q: All right. 19 MADAM COMMISSIONER: And when was that? 20 THE WITNESS: December 15th, 1999. 21 MADAM COMMISSIONER: Right, thanks. 22 23 CONTINUED BY MR. RONALD MANES: 24 Q: Was there anything in there that -- 25 MR. FRED CHENOWETH: Just before we proceed,

1 Madam Commissioner -- 2 MADAM COMMISSIONER: Yes. 3 MR. FRED CHENOWETH: -- I want to note that I 4 think the effect of her evidence is not that she examined the 5 document, but that she -- she had a brief opportunity, only 6 having received it the night before she was on the stand, to 7 give it a cursory review, so -- 8 MADAM COMMISSIONER: Well, I didn't hear her 9 say that, Mr. Chenoweth. I think in fairness to this 10 witness, Ms. Payne, from where I sit, appears to be a very 11 sophisticated, intelligent person, and if she was going to 12 say she gave it a cursory review, I would have expected her 13 to say that she gave it a cursory review. 14 What I heard her to be saying, is she looked 15 at the whole document, but basically she spent more time on 16 the part up to when she was there. 17 MR. FRED CHENOWETH: Madam Commissioner, as 18 you would know, from time to time it has been an issue, I 19 understand, through the course of these Proceedings, that 20 documents don't come to witnesses at an early time, and 21 certainly these documents were received by Ms. Payne very 22 shortly before she went in the witness box, in all -- 23 MADAM COMMISSIONER: As she was walking -- 24 MR. FRED CHENOWETH: Yes, in all of those 25 circumstances, it strikes me that in fairness to this

1 witness, before we -- in -- in that she got the documents in 2 a -- in a -- in a somewhat untimely way, it strikes me it's 3 fair to the witness to explore whether, in fact, if we're 4 going to make an assumption that she in some manner examined 5 these in real detail and was there therefore as a result of 6 that detailed examination something the struck her as unique 7 I think in fairness, given the timing of her receipt of the 8 documents, we should clarify the extent to which she may have 9 had an opportunity to review those documents, before we make 10 a presumption that may or may not be sound in the unique 11 circumstances of the delivery of these documents to her. 12 MADAM COMMISSIONER: It has come up from time 13 to time, I recall with Mr. Balkissoon, I believe, and also 14 with Mr. Garrett, that documents came in that had not been 15 provided to the Commission sufficiently in advance for us to 16 have them scanned or to make copies of them. 17 And sometimes, in fact, they come from Counsel 18 the night before. On, I think both of those occasions, but I 19 know for sure, with Mr. Garrett, that I provided him with the 20 opportunity to spend more time looking at the documents if he 21 wanted to. 22 And on one (1) of the occasions, I believe, we 23 started a little later to give him the opportunity that he 24 needed to read the document. 25 I have no problem whatsoever if Ms. Payne

1 would like to break early and take an opportunity to read 2 through the documents, if that would make her feel more 3 comfortable answering any questions. 4 But, I certainly don't intend to preside over 5 an Inquiry where people are being sabotaged. I said that 6 right from the very beginning that I want witness to have 7 full opportunity. 8 MR. FRED CHENOWETH: In order -- in order to 9 cooperate with the Commission, I've not objected to the fact 10 that as late as in the late afternoon of the day before Ms. 11 Payne being required to testify, we had documents with seven 12 (7) Tabs in them. 13 By the late afternoon of that day, we had 14 documents allegedly with forty-eight (48) tabs in them. By 15 the next morning, we had another book of documents. 16 I have not made that a source of objection. 17 But, my simple point is that if Counsel intends to put to 18 this witness that she reviewed these documents to the extent 19 that she's able to tell us whether or not a matter of an 20 expense she found extraordinary or not extraordinary, in the 21 circumstances that I've described, I simply say is unique. 22 I don't -- it may be that Ms. Payne, if 23 Counsel persists with that line of question, will be required 24 to have an opportunity to review the documents. 25 MADAM COMMISSIONER: All right.

1 MR. FRED CHENOWETH: However, if he chooses to 2 rephrase the question, it may be that she'll not need an 3 opportunity to review them. 4 MADAM COMMISSIONER: All right. Mr. Manes, is 5 there anything specific that you want to say? 6 My feeling would be, why don't we see whether 7 the witness has a problem with any of the questions, first. 8 And then when she has a problem, then we can either go back 9 to an original -- a source document, or give her time to 10 read. 11 But, if she doesn't have any problem with it, 12 then we're all just having a nice chat for nothing. Okay? 13 Mr. Manes, is there anything in particular you 14 want to say? 15 MR. RONALD MANES: No. 16 MADAM COMMISSIONER: Okay. 17 MR. FRED CHENOWETH: Might I understand what 18 the nature of the question is? As I understood the question 19 it was -- 20 MADAM COMMISSIONER: Let's see -- you know, I 21 think probably Mr. Manes has forgotten the question and I 22 certainly have. I don't have it. Mr. Manes could you ask 23 your question? 24 MR. RONALD MANES: It was just a question in 25 the ordinary course. I -- I'll just -- I can't remember the

1 exact question, but I'll just go on and ask the -- 2 MADAM COMMISSIONER: Ask another one (1). 3 MR. RONALD MANES: All right. 4 5 CONTINUED BY MR. RONALD MANES: 6 Q: I believe we'd last established that you 7 had gone through the entire document and spent more time on 8 the period that involved you than on the subsequent period 9 after you'd left, that's December 15th, 1999? 10 A: Right. But, quite honestly, the document 11 doesn't say an awful lot, where are the worksheets for the -- 12 where is the detail level of these reports? 13 MADAM COMMISSIONER: Well, Ms. Payne, this was 14 just prepared by Commission Counsel to pull it all together 15 in one (1) spot. 16 THE WITNESS: Yes. 17 MADAM COMMISSIONER: But, if you need any of 18 the background stuff, I believe all of that is somewhere. It 19 is. Okay. 20 21 CONTINUED BY MR. RONALD MANES: 22 Q: So, at any time, if I ask you a question 23 that makes you uncomfortable, unless you see the specific 24 background document -- 25 A: Then I'll let you know.

1 Q: -- then you'll let me know. All right. 2 I -- my own fingers have counted that there 3 were about thirteen (13) entries with respect to Mr. Jakobek 4 from -- well, the first time this was kept January 27, 1998 5 to the time you left in December of -- of -- December 15th of 6 1999. 7 Do you assume I'm right on that that there are 8 -- that -- there were that number or approximately that 9 number of entries? Can you tell me what would account for 10 that amount of -- of entertaining Mr. Jakobek? 11 MR. DAVID MOORE: I'm going to interject 12 here. 13 MADAM COMMISSIONER: Okay. 14 MR. DAVID MOORE: I have not been critical of 15 Commission Counsel in terms of the preparation of the 16 summary. I think that point was made quite clear during the 17 cross-examination or my re-examination or whatever you want 18 to call it of -- of -- of Mr. Wolfraim, but it was abundantly 19 clear from that examination that the underlying documentation 20 contained certain errors, including certain errors, I didn't 21 go into every last detail and I believe My Friend knows that, 22 in terms of Mr. Jakobek, there are certain areas where there 23 are mistakes with respect to that in the underlying 24 documents. 25 So if the factual premise of My Friend's

50
  1  question, that -- that every time a Jakobek name appears on
  2  the summary derived, I acknowledge, from the underlying
  3  documents that that represents an actual instance of
  4  entertainment of Mr. Jakobek.  I believe My Friend knows that
  5  that is factually unsound.
  6                 MADAM COMMISSIONER:   Okay.  So let me s --
  7  let me make sure I have it.  What -- what we know from what
  8  Mr. Wolfraim said is that Mr. Domi said that -- that there
  9  are mistakes -- some mistakes in the documents.
 10                 MR. DAVID MOORE:   Yes.
 11                 MADAM COMMISSIONER:   Right.  Okay.  So that's
 12  we're at.  We haven't had Mr. Domi yet so I think as far as 
 13  -- the only -- I think we can only go so far as to say that
 14  Mr. Domi told Mr. Wolfraim that there are errors in the -- in
 15  the expenses.
 16                 MR. DAVID MOORE:   W -- we know --
 17                 MR. FRED CHENOWETH:   I think that --
 18                 MADAM COMMISSIONER:   I don't think at this
 19  point -- at this point, Mr. Moore, without having heard from
 20  Mr. Domi myself, and we are hearing from him next week --
 21                 MR. DAVID MOORE:   Yes.
 22                 MADAM COMMISSIONER:   -- and I'm going to have
 23  make findings of credibility on him, obviously,  --
 24                 MR. DAVID MOORE:   Yeah.
 25                 MADAM COMMISSIONER:   -- on this area.  I

1 think as far as I'm concerned, we can only go so far as to 2 say that Mr. Wolfraim said that Mr. Domi said that there are 3 errors. 4 MR. DAVID MOORE: No. I -- I appre -- that's 5 the record before you. 6 MADAM COMMISSIONER: Right. 7 MR. DAVID MOORE: My concern is that I 8 believe My Friend has information that would indicate and now 9 I didn't try to get into chapter and verse with Mr. Wolfraim 10 for a variety of reasons. He's coming back and -- and I 11 won't get into it all. 12 But -- but -- but I believe that My Friend 13 knows independent of what you have on the record before that 14 there are issues and -- and factual questions about various 15 entries and I'm just concerned about the -- the underlying 16 premise of the question that's being put to this witness that 17 -- that -- that presupposes the opposite. That's my concern. 18 MR. RONALD MANES: The -- the -- the fallacy 19 -- 20 MADAM COMMISSIONER: Hmm hmm. 21 MR. RONALD MANES: -- in My Friend's 22 reasoning is that he are looking at this from what he says 23 that he knows now. I am taking the witness back to the time 24 that these entries were made and appeared to -- in the 25 records of MFP, were approved in a process which included Mr.

1 Rollock, Ms. Vivaldo and ultimately Ms. Payne. 2 MADAM COMMISSIONER: So, you -- 3 MR. DAVID MOORE: So what -- what -- what's 4 -- what's the -- 5 MADAM COMMISSIONER: I -- 6 MR. DAVID MOORE: No, but -- 7 MADAM COMMISSIONER: -- I -- 8 MR. DAVID MOORE: -- but -- but what's the 9 relevance of that? 10 MADAM COMMISSIONER: Mr. Moore? 11 MR. DAVID MOORE: The -- the -- that was -- 12 MADAM COMMISSIONER: Mr. Moore? 13 MR. DAVID MOORE: I'm sorry. 14 MADAM COMMISSIONER: As I understand then, 15 Mr. Manes, what you're asking is assuming that you believe 16 these to be accurate. Is that right? 17 Assuming you -- assuming you've got all -- 18 you've got these expense accounts and there are about 19 thirteen (13) or so that have the name Mr. Jakobek in them 20 and assuming that you thought -- that you had every reason to 21 think at the time that they were accurate and then I don't 22 know what you're question is after that. What would account 23 for the entertainment -- entertaining? 24 So, Mr. Moore? 25 MR. DAVID MOORE: Well, except that wasn't --

1 the -- the question was simply put, what would the -- what 2 would account for Mr. Jakobek -- 3 MADAM COMMISSIONER: That's right. 4 MR. DAVID MOORE: -- to be entertained 5 thirteen (13) times as if, in fact, he was entertained 6 thirteen (13) times. There's a whole bunch of assumptions 7 and whereas-es and wherefores that you just postulated that 8 were not part of My Friend's question at all. That -- that's 9 my concern. 10 MADAM COMMISSIONER: Well, Mr. Manes, why 11 don't you do it -- I think -- I think -- Mr. Moore, do you 12 have a problem with the way that I had put it? 13 MR. RONALD MANES: All right. 14 MADAM COMMISSIONER: Assuming that these were 15 -- that these were correct. 16 MR. DAVID MOORE: I'm -- I'm not sure how -- 17 how useful it is, if in -- if -- if we don't know if they're 18 correct, but -- but that's -- 19 MADAM COMMISSIONER: Well, -- 20 MR. DAVID MOORE: -- certainly a fairer way 21 of putting it. 22 MADAM COMMISSIONER: Okay. 23 MR. RONALD MANES: All right. I'll put the 24 question again, in -- in my way, if I could. 25

1 CONTINUED BY MR. RONALD MANES: 2 Q: And this is, I -- I take it, in reference 3 to -- to MFP's policies. 4 Assuming the entries in Mr. Domi's count -- 5 account were legitimate, and that he -- there were 6 approximately thirteen (13) entries to December 15th, in 7 relation to entertaining Mr. Jakobek. 8 Can you tell me what would account for that 9 much entertainment of -- of Mr. Jakobek in that period of 10 time? 11 And if I can assist you just a bit, the first 12 entry we have involving Mr. Jakobek, is February 23rd, 1999, 13 breakfast. And the last entry -- 14 MADAM COMMISSIONER: Mr. Manes, it might be 15 more helpful if you could tell us what the number is on the 16 left -- 17 MR. RONALD MANES: Yes, that would be -- 18 MADAM COMMISSIONER: -- hand side. 19 MR. RONALD MANES: -- that's quite right. 20 The -- the number would be thirteen (13), and the last entry 21 with Mr. Jakobek's name on it would be -- 22 MADAM COMMISSIONER: 106? 23 24 CONTINUED BY MR. RONALD MANES: 25 Q: November 29th, 1999, number 106. To your

1 -- to your knowledge -- 2 A: Well the -- 3 Q: -- if you can take your mind back, what 4 -- what would account for that amount of entertainment? 5 A: -- the thirteenth entry, which is the 6 fifty-six dollars and ninety cents ($56.90), that was a 7 breakfast that I was at. And so that's the meeting I had 8 with Tom Jakobek. 9 Q: That's number 13? 10 A: Yes. 11 Q: Right. But I'm just asking you if it's 12 just from -- from your recollection at the time, whether you 13 can give the Commissioner any assistance as to -- to explain, 14 what would account for that amount of entertaining of Mr. 15 Jakobek, from February 23rd, 1999 in the -- in number 13, to 16 number 106, November 29th, 1999? Taking your mind back of 17 course to that period of time. 18 19 (BRIEF PAUSE) 20 21 A: I am not so sure that -- that there were 22 that many meetings or that many -- that there were that many 23 entries here that he would -- or actually Tom was at -- at 24 these events. 25 Q: How would you know that back then, if you

56
  1  didn't review the -- 
  2                 A:   I actually read Peter's transcripts, that
  3  he had met with Dash Domi.
  4                 Q:   But I'm asking you for your own
  5  recollection?
  6                 A:   My own recollection is that I can't
  7  imagine him having met with him this many times in this
  8  environment.
  9                 Q:   Well, let me -- let me take you to --
 10  when you say in this environment, what -- what environment
 11  are you -- 
 12                 A:   In an entertainment, meals, dinner -- 
 13                 Q:   All right.
 14                 A:   -- lunches. 
 15                 Q:   But when you say you can't imagine, are 
 16  -- are you saying that there's nothing in what you observed
 17  yourself, or what was told to you by Mr. Domi or anything
 18  else, that would explain it?
 19                 A:   No.
 20                 Q:   All right.
 21  
 22                       (BRIEF PAUSE)
 23  
 24                 Q:   Well then let me take you to number 44.  
 25

1 (BRIEF PAUSE) 2 3 Q: Did you review this entry, this 4 particular entry before coming here, or have discussions with 5 Commission Counsel about this entry, May 2nd, 1999, an 6 expense report of sixty four hundred and twenty dollars 7 ($6420) for a Philadelphia Flyers Maple Leaf game at First 8 Union Centre in Philadelphia? 9 A: Yes. 10 Q: Did you personally approve that? 11 A: Yes. 12 Q: Now, can you -- can you explain to the 13 Commissioner the circumstances surrounding that particular 14 entertainment, so the Commissioner can have an appreciation 15 of it? 16 A: Yes. MFP is well known as a relationship 17 company. A good part of our work was building these 18 relationships with our client base at all different levels 19 within the organizations. 20 So, we hosted many events. Examples would be, 21 we had a Blue Jays day, where our customers would bring in 22 their children, one (1) child per customer. 23 We had a theater evening. We had golf 24 tournaments. We did individual seminars with our customers 25 and then potentially would have it catered.

1 And the one (1) that I know we had done once 2 before as a company, I think was in the States. But, the one 3 (1) that we see here is where we -- where we chartered or 4 rented a small plane to take a number of our clients to a 5 hockey game. 6 And we actually did it a number of times. I 7 think there was two (2) or three (3). And this was one (1) 8 of those expenses. I think it's -- yes, the Philadelphia 9 game. 10 Q: All right. Mr. Domi would have come to 11 you for approval of this before? 12 A: Yes. 13 Q: So, I take it, when Mr. Domi came to you 14 for approval, he explained the business purpose for this 15 trip? 16 A: Well, the business purpose was to bring a 17 number of clients to the game to discuss how we could work 18 with these -- with these particular individuals within the 19 customer base, with our clients. 20 Q: That's what he -- that's what Mr. Domi 21 would have explained to you? 22 A: Yes. 23 Q: All right. And the -- he would have told 24 you, I take it, who the clients were that he was to 25 entertain?

1 A: No, at the time when he organized it he 2 would probably not know who he was going to have there. But, 3 you know, we had a team of at least ten (10), twelve (12), 4 sales representatives in the Toronto office. 5 There was no shortage of customers that would 6 go to this kind of event. 7 Q: When you say, he would not have known who 8 was going to attend, I want you to cast your mind back and 9 your specific recollection, did Mr. Domi tell you who he 10 proposed to take on that plane? 11 A: I would think it would have been a number 12 of the provincial customers. 13 Q: But, again, I would like a specific answer 14 here from your own recollection. Do you recollect whether 15 Mr. Domi told you what clients he intended to take on this 16 trip for, at least for the airline expense, sixty four 17 hundred and twenty dollars ($6420)? 18 A: No. 19 Q: So, then as I take it, some time prior to 20 May 2nd, 1999, Mr. Domi came to you, told you that he wanted 21 to charter a plane to Philadelphia for the Philadelphia 22 Flyers game, that it was going to cost, six or seven thousand 23 dollars ($6000-$7000) and you approved it on the basis of 24 that information? 25 A: I approved it on the basis that, if you

1 look prior to that, the events that we've had, and you'll 2 seen them in entry, for instance, 41 and a number of others 3 throughout this summary. 4 We had a box -- we rented a box at the -- at 5 the arena and we always, always had a full house. So I had 6 no concern, between twelve (12) reps in Toronto, with 7 multiple accounts and keeping in mind, MFP has approximately 8 two thousand (2,000) customers that would be able to fill a 9 small plane. 10 I'm not sure whether it was six (6) or eight 11 (8) people that could get into this plane, but for sure I was 12 confident that we would be able to get the customers out to 13 justify the six thousand dollars ($6,000). 14 Q: Is your evidence that you did not ask Mr. 15 Domi what clients he had in mind? 16 A: My evidence is that he would be selecting 17 customers that he was working with. Obviously, he was 18 working with the province, he was working with the City, he 19 was working with York region, he was working with a number of 20 other accounts. 21 It was my information that he would bring out 22 the -- the caliber of individuals that we needed to support 23 it. 24 Q: Caliber meaning people that you wanted or 25 were doing business with?

1 A: Our customers. 2 Q: Well, am I to -- to take from that that 3 as far as you were concerned, it could have been six (6) 4 employees of the City of Toronto IT Department that Mr. Domi 5 was taking on that plane to Philadelphia? 6 A: If those six (6) employees were critical, 7 you know, in our long term relationship with the customer 8 base, that would have been an option. 9 Q: When you say that would have been an 10 option -- 11 A: What I'm saying -- 12 Q: -- that would have been all right with 13 you? 14 A: Yes. What I'm saying is that I was 15 confident in the sales team to get the caliber of the 16 individuals to the event. 17 Q: But I -- I just would -- need, if I could 18 get a direct answer to my question. At no time did you ask 19 Mr. Domi or did Mr. Domi tell you who he had in mind to be on 20 that plane? 21 A: Not that I recall. 22 MADAM COMMISSIONER: How are you doing? Are 23 you okay? 24 THE WITNESS: Yeah. I've got a tickle. 25 MADAM COMMISSIONER: Actually, you know what,

1 it is -- 2 MR. RONALD MANES: All right. 3 MADAM COMMISSIONER: It's 11:30. This is 4 when we would normally take a break in any event so why don't 5 we take a break and you can clear up your tickle. 6 THE WITNESS: Thank you. 7 MADAM COMMISSIONER: Then we'll come back at 8 -- at ten (10) to. 9 THE REGISTRAR: This court is recessed until 10 ten (10) to 12:00. 11 12 --- Upon recessing at 11:30 p.m. 13 14 --- Upon resuming at 11:50 p.m. 15 16 THE REGISTRAR: The Inquiry will resume. 17 Please be seated. 18 19 MADAM COMMISSIONER: Yes, Mr. Manes? 20 21 CONTINUED BY MR. RONALD MANES: 22 Q: In respect to this entry at Tab 45, 23 expense summary, Dash Domi, Entry 44 with respect to the 24 Philadelphia Flyers game in Philadelphia. Did Mr. Domi tell 25 you or estimate for you what the approximate cost of that

1 excursion would be to MFP? 2 A: Approximately five thousand (5,000). 3 4 (BRIEF PAUSE) 5 6 Q: For the whole thing? 7 A: Well for the -- for the -- for the actual 8 aircraft -- 9 Q: All right, but in terms of the cost of 10 the excursion? 11 A: No, we didn't discuss that. 12 Q: All right, but you do remember that 13 specifically, that -- that he told you it would be 14 approximately five thousand dollars ($5,000) for the cost of 15 the aircraft? 16 A: I'd heard that through other sources that 17 that was their cost, and I assumed that it would have been 18 around the same. 19 Q: Well, again, I'm interested in what Mr. 20 Domi told you. Did Mr. Domi tell you that that would -- that 21 the cost of the plane would be approximately five thousand 22 dollars ($5,000)? 23 A: I'm not sure whether he actually said 24 that, or whether I assumed it was in and around there because 25 of other situations I'd been involved in.

1 Q: Are you saying that this is not the first 2 excursion of this kind that MFP has sponsored, but that there 3 had been others to the extent that you were able to estimate 4 in your own mind, that the cost of the flight would be 5 approximately five thousand dollars ($5,000)? 6 A: We had done a similar event in the 7 States. 8 9 (BRIEF PAUSE) 10 11 Q: If I can take you to number 21. 12 13 (BRIEF PAUSE) 14 15 Q: The entry here, April 17th, 1999, is: 16 "City/TO, V. Nigro, Jakobek, J. Danson, 17 Montreal Centre -- Montreal Molson Centre, 18 Montreal ..." 19 MADAM COMMISSIONER: Mr. Manes, which one (1) 20 are you on, you said 21? 21 MR. RONALD MANES: Thirty-one (31), I'm 22 sorry, Commissioner, 31. 23 24 CONTINUED BY MR. RONALD MANES: 25 Q: "City of Toronto, V. Nigro, T. Jakobek,

1 J. Danson, four hundred and sixty-four 2 dollars ($464), Molson Centre, (Montreal 3 Hockey Tickets.)" 4 And appreciating that at 30, April 16th, 1999: 5 "Five thousand six hundred and sixty-two 6 dollars and seventy cents ($5,662,70), Sky 7 Charter Limited, round trip charter flight 8 to Montreal." 9 And then there's -- at 32 there's a: 10 "Cab expense of two hundred and fifty-five 11 dollars ($255), City of Toronto, Government 12 of Ontario, cab transportation expense." 13 Did Mr. Domi seek your approval with respect 14 to that particular Sky Charter Flight, April 16th, 1999, 15 assuming of course that that it occurred? 16 A: Yes. 17 18 (BRIEF PAUSE) 19 20 Q: Can you tell, did he discuss with you 21 who he was intending to take on that flight? 22 A: No. 23 Q: Again, you assumed that what -- whatever 24 -- whoever he took would be a -- an appropriate legitimate 25 business purpose?

1 A: That's right. 2 Q: That he could fill the flight? 3 A: That he could fill the flight or the rest 4 of the sales team would just take it up, whereas if he could 5 only have two (2) people attend, then we would ask the rest 6 of the reps in the Toronto office, who else would like to 7 attend. In fact, that happened on more occasions than not. 8 Q: Right. So this is another occasion the 9 -- the cost here appears to be around six thousand (6,000) 10 some dollars, for this excursion? 11 A: Yes. 12 Q: In either of these two (2) cases, April 13 17th, 1999 or May 2nd, '99, first occasion being to Montreal 14 and second occasion being to Philadelphia, did you ever in 15 any of these discussions that you had with Mr. Domi, ask him, 16 so who did you take? How did it go? What business did you 17 serve? 18 A: I'd ask him how it went, and he would say, 19 it was successful. We had a full team or a full -- I'm not 20 even sure how many people went on the plane, how many seats 21 were available, but I assume they were booked full. 22 Q: Well, didn't your professional, or at 23 least natural curiosity provoke you to say, so who was on the 24 plane? 25 A: As I mentioned to you yesterday, twenty

1 nine (29) reps, four (4) sales managers, I didn't get to the 2 detail level of who went on each event. 3 Q: You are responsible for your sales reps 4 performance? 5 A: That's right. 6 Q: And you keep tabs to a certain extent on 7 that performance? 8 A: Yes. 9 Q: And that performance is, in your 10 philosophy, in MFP's philosophy is based on establishing 11 relationships and those relationships producing? 12 A: Yes. 13 Q: And here you've spent on two (2) trips, 14 you've spent almost thirteen thousand (13,000) or more 15 dollars, and you haven't even asked who was on the plane, 16 what relationships did you establish, where do you want to go 17 with this? 18 A: That's right. 19 Q: Did you have any interest in whether there 20 was a certain category of people on the plane? For example, 21 Provincial officials, municipal officials, employees of the 22 IT Department at the City of Toronto? 23 Did you have any interest or did you make any 24 inquiries in that regard, on either of these two (2) trips? 25 A: I trusted the sales force to make sure

1 that the caliber of individuals were there and that they 2 would be sensitive to who would attend this event -- or any 3 event actually, any event. 4 Q: All of these expenditures that you've 5 received, all of -- these two (2) events that you and I have 6 just reviewed, these two (2) flights, they were calculated to 7 invest money in creating strong relationships with the people 8 that attended them? 9 A: That's right. 10 Q: Now, there are by my count, six (6) or so 11 entries in relation to John Danson. What business purpose 12 with Mr. Domi have in mind or discuss with you in respect to 13 Mr. Danson? 14 MR. FRED CHENOWETH: Are we again with respect 15 to Mr. Danson, going to use the premise that if in fact there 16 was six (6) entertainments of Mr. Danson? 17 Are we going to make it a hypothetical, I take 18 it, as we have with the Domi number of thirteen (13)? 19 MADAM COMMISSIONER: Sure, I guess so. 20 MR. RONALD MANES: I said -- 21 MADAM COMMISSIONER: You said, what business 22 purpose would Mr. Domi have in mind or discussed with you, 23 with respect to John Danson. 24 MR. RONALD MANES: So, I'm taking the witness 25 back and I'm talking about the mind --

69
  1                 MADAM COMMISSIONER:  Before --
  2                 MR. RONALD MANES: -- at the time.
  3                 MADAM COMMISSIONER:  At the time.  Okay.
  4                 All right.   
  5                 THE WITNESS:  I'm not sure how Dash got to
  6  know John Danson, but John Danson has a company that supplies
  7  training and education to both the public sector and the
  8  private sector.  A very successful individual.
  9                 I would imagine that Dash would spend time
 10  with him to better understand how he could provide some of
 11  John Danson's company's services to his potential clients or
 12  existing customers.
 13  
 14  
 15  CONTINUED BY MR. RONALD MANES: 
 16                 Q:  You -- when you say -- I thought I heard
 17  you use the word, imagine.  
 18                 MADAM COMMISSIONER:  She said, I would imagine
 19  he would spend time?
 20                 MR. RONALD MANES:  Yes.
 21  
 22  CONTINUED BY MR. RONALD MANES: 
 23                 Q:  Did you have any specific knowledge at the
 24  time, because I'm interested in what your specific knowledge
 25  was at the time, as to what business purpose, Mr. Domi had in

1 mind in respect to Mr. Danson? 2 A: It would to be to offer their services -- 3 potentially offer their services to some of our customer 4 base. They have the training and technology. 5 Q: Did you know, at the time, that Mr. 6 Danson had been the Mayor's campaign manager -- 7 A: I didn't know. 8 Q: -- at one (1) time? 9 A: I didn't know that at the time. 10 Q: All right. So I take it that what you 11 have said to me in relation to Mr. Danson and business 12 purpose was the only discussion -- or rose out of a 13 discussion between you and Mr. Domi regarding Mr. Danson? 14 A: Yes. 15 Q: All right and that's all you can 16 recollect as to what you knew about Mr. Danson? 17 A: I -- I actually got to meet John Danson 18 at some point and I was quite impressed with the company that 19 he built and would like to see how we could work with him to 20 provide the services to our customer base. At that time I 21 learned that he had worked closely. 22 Q: Do you recall when that was? 23 A: No. 24 MADAM COMMISSIONER: You -- and -- and then 25 that you wai -- that you learned that --

1 THE WITNESS: And I -- I then understood, 2 earlier on I was asked the question whether I knew he was -- 3 had worked with Mel Lastman. 4 MADAM COMMISSIONER: I see, okay. 5 THE WITNESS: It wasn't until probably three 6 (3) or six (6) months later that I realized that. I -- I was 7 looking or I'm sure Dash was looking to see how we could 8 offer their products. In fact, some of our clients did end 9 up working with John's company. 10 MR. RONALD MANES: All right. 11 12 CONTINUED BY MR. RONALD MANES: 13 Q: When you say, three (3) to six (6) months 14 later? 15 A: Three (3) to six (6) months from when 16 Dash Domi joined the company. 17 Q: I see. All right. In No -- in late 18 October, November 1999 -- '98. 19 MADAM COMMISSIONER: '98. 20 21 (BRIEF PAUSE) 22 23 CONTINUED BY MR. RONALD MANES: 24 Q: That would take us -- just in respect to 25 Mr. Danson, when you learned that that would take us to

1 February, March 1999? 2 A: I -- I -- I'm just giving you a rough 3 estimate. 4 Q: I understand. 5 A: I'm not exactly sure. 6 Q: Now, as well, I counted -- I'll put it to 7 you in -- in -- in approximation, possibly five (5) times 8 entertainment entries with respect to Mr. Rob Godfrey. 9 Again the same question, do you have any idea 10 what Mr. Domi had in mind at that time in respect to 11 promoting a relationship with Mr. Godfrey, in terms of a 12 business purpose. 13 MADAM COMMISSIONER: Again, I'm taking this 14 all -- assuming that they are -- that they are accurate. 15 MR. RONALD MANES: All of the questions? 16 MADAM COMMISSIONER: All of them. 17 THE WITNESS: I'm not sure what level of 18 detail he went through with Rob; what the meetings were 19 about. 20 21 CONTINUED BY MR. RONALD MANES: 22 Q: And there were approximately three (3) 23 entertainment vouchers in relation to Mr. Paul Godfrey. Same 24 question, do you have any idea in your discussions with Mr. 25 Domi or otherwise, what Mr. Domi had in mind in relation to

1 promoting Mr. Paul Godfrey? 2 A: No. 3 4 (BRIEF PAUSE) 5 6 Q: Let me take you to June 17, 1999. Number 7 64. 8 9 (BRIEF PAUSE) 10 11 Q: That is an entry June 17, 1999 for two 12 hundred and twenty five dollars and seventeen cents 13 ($225.17), Toronto Sun, T. Godfrey, J. Lyons at Il Posto 14 Nuovo, dinner, drinks. 15 A: Does that assist you at -- at all as to 16 what Mr. Domi had in mind in -- in relation to Mr. Godfrey, 17 that's Paul Godfrey, at that time, of course? 18 A: No. 19 Q: Did Mr. Domi ever talk to you about 20 promoting a business relationship with the Toronto Sun? 21 A: I actually went to a meeting with him, 22 and I met Paul Godfrey, I'm not sure when that was, but I did 23 have one (1) meeting with him. 24 Q: All right. 25 A: To see how we could work with the Sun.

1 Q: All right, and other than that meeting, 2 did Mr. Domi talk to you about promoting a relationship with 3 Paul Godfrey and the -- and the Toronto Sun? 4 A: No. 5 Q: Was it your understanding that Mr. Domi's 6 relationship with Mr. Godfrey arose out of some relationship 7 with the Toronto Sun, or was that -- was it your 8 understanding that it was a personal relationship that he had 9 with Mr. Godfrey? 10 A: I don't think he had a personal 11 relationship with Mr. Godfrey. 12 Q: Nothing in your discussions -- 13 A: To my knowledge. 14 Q: -- nothing in your discussions with Mr. 15 Domi led you to believe that -- that he knew Paul Godfrey 16 personally? 17 A: We talked a little bit about it yesterday 18 when I said that until Dash Domi was with the company, I 19 don't think he was -- he knew any of these people, to my 20 knowledge. 21 Q: I -- I appreciate that, I'm talking 22 about, and if you recall your evidence was as you got to know 23 Mr. Domi, you got to know his relationships better, and one 24 (1) of those relationships was Mr. Godfrey, Paul Godfrey? 25 A: Yes.

1 Q: Now, was it your understanding that he 2 had a personal relationship with Mr. Godfrey, or was his 3 relationship a purely business relationship? 4 A: Business, to my knowledge. 5 Q: Is that what he told you, or is that the 6 essence of what your understanding was from -- 7 A: That's -- 8 Q: -- your discussions with him? 9 A: -- that's my understanding. 10 Q: Now, this -- this is interesting here, 11 because he is entertaining, that is Mr. Domi is entertaining 12 as well, Mr. -- let's assume this is -- this J. Lyons is Mr. 13 Jeffrey Lyons? 14 MR. DAVID MOORE: Well, the assumption -- 15 MADAM COMMISSIONER: Right. 16 MR. DAVID MOORE: -- is built into the 17 question, but in fairness to Mr. Domi and to my client as 18 well, I anticipate, and I think My Friend knows, and Mr. Domi 19 will say that Mr. Lyons is not at that meeting. But -- but 20 we're not going to hear about that for another week or ten 21 (10) days, and in the meantime, we have this record. And 22 that I'm just concerned about it. 23 MR. RONALD MANES: Well -- 24 MADAM COMMISSIONER: Mr. Manes...? 25 MR. RONALD MANES: I appreciate that. I'm

1 taking the witness yet again, to repeat it, back to her state 2 of mind at the time, and only asking questions in relation to 3 that state of mind, and going about to ask her the question 4 of whether she knew that Mr. Lyons was being entertained by 5 the company, according at least to this entry, and what her - 6 - 7 MADAM COMMISSIONER: But you're not asking 8 her if -- 9 MR. RONALD MANES: -- reaction was. 10 MADAM COMMISSIONER: -- she knew he was being 11 entertained, but whether she knew whether he was being 12 entertained? 13 MR. RONALD MANES: Yes. 14 MR. DAVID MOORE: And that's a very good 15 question, my concern though is really in the context of this 16 being a Public Inquiry -- 17 MADAM COMMISSIONER: Right. 18 MR. DAVID MOORE: -- with the educational 19 purposes for the public, with the media, with the publicity 20 that attaches -- 21 MADAM COMMISSIONER: Hmm hmm. 22 MR. DAVID MOORE: -- we're not in a trial 23 like setting here, where -- where you have a Judge saying, 24 well, we'll sort out all the evidence at the end of the day. 25 There's an ongoing aspect to this that makes a

77
  1  difference in that, and -- and the difficulty is that -- that
  2  -- that when the evidence comes out, as obviously you were
  3  mindful at the outset, when you made the observations that no
  4  one should make any judgments or draw any conclusions until
  5  everything has been heard.  That's very difficult for the
  6  public and the media to do, when we have a long Inquiry
  7  that's going over months and months -- 
  8                 MADAM COMMISSIONER:   Right.
  9                 MR. DAVID MOORE:   -- and -- and by definition
 10  it becomes a matter of public record as we go in dribs and
 11  drabs.  That's my concern, I'm not -- not so much critical of
 12  -- of -- I understand My Friend's question, it's just that
 13  the impression it may otherwise leave if I don't say
 14  something, that's all.
 15                 MADAM COMMISSIONER:   Yes.
 16                 MR. DAVID MOORE:   Thank you.
 17                 MADAM COMMISSIONER:   Yes.  
 18  
 19  CONTINUED BY MR. RONALD MANES:
 20                 Q:   Let me take you back to this entry at --
 21  at number 64, according to this -- according to this entry
 22  anyhow, Mr. Lyons was being entertained by MFP and Mr. Domi
 23  on June 17th, 1999, when according to your evidence,
 24  yesterday and -- and this morning, Mr. Domi had brought to
 25  your attention what he considered Mr. Lyons conflict in

1 acting for DFS, and you had written a very hard letter to Mr. 2 Lyons, and fired him. 3 And here, this is less than three (3) weeks 4 later and he's being entertained by Mr. Domi. 5 My question is, did Mr. Domi ever talk with 6 you about his -- about any intention to entertain Mr. Lyons? 7 A: No. 8 Q: In respect to this particular entry, June 9 17th, 1999, T. Godfrey, J. Lyons, did Mr. Domi ever discuss 10 with you his intention to take -- to promote Mr. Godfrey and 11 Mr. Lyons? 12 A: No. 13 Q: Together? 14 A: No. 15 Q: Did you have any information from Mr. 16 Domi, as to the relationship between Mr. Lyons and Mr. 17 Godfrey? That is Paul Godfrey? 18 A: I'm sorry? 19 Q: Did you have any information from Mr. Domi 20 as to the relationship between Mr. Jeffrey Lyons and Mr. Paul 21 Godfrey? 22 A: No. 23 Q: Did you have any understanding from 24 reading the newspapers, from your colleagues, or otherwise, 25 that they were good friends at that time?

1 A: I didn't hear they were good friends. 2 Q: What did you hear? 3 A: I knew they were -- they had been 4 associated with each other in some capacity, but never delved 5 into what that was. 6 Q: I take it that assuming this entry were 7 true, you would not be able to say what business purpose Mr. 8 Domi would have in taking Mr. Lyons out? 9 A: That's right. 10 Q: Now, it was Mr. Rollock who composed the 11 letter, the harsh letter that was sent out? 12 A: Yes. 13 Q: At the end of May 1999, correct? 14 A: Yes. 15 Q: And it was Mr. Rollock who was part of the 16 approval process, in fact, he was the first stage of the 17 approval process for all expenses? 18 A: Yes. 19 Q: Of Mr. Domi. So, I take it that we 20 should, for the purpose of your evidence, assume that Mr. 21 Rollock did his job and reviewed these expenses, and in 22 particular, this expense, and approved it? 23 A: Yes. However, the sales force was 24 notorious, and Dash from what I've heard in the past, for 25 putting his expenses in two (2) or three (3) months later.

1 So, this is dated what, the 17th of June? 2 Q: Yes. 3 A: Potentially this had been signed off and 4 you'd have to check the MFP records, this could have 5 potentially been signed off in August/September. 6 Q: Let me ask you something. Let's just 7 assume that, for a moment, that is was not until August, for 8 example, that this expense was submitted. 9 If you saw that expense at that time, wouldn't 10 you have questioned why he would be taking out Mr. Lyons 11 after the hard letter that was sent under your name? 12 A: If you would have looked closely enough at 13 it, yes, you would have. 14 MADAM COMMISSIONER: I think the question was, 15 wouldn't you have? 16 THE WITNESS: Yes, I would have, had I looked 17 closely at it, I would have questioned it. 18 19 CONTINUED BY MR. RONALD MANES: 20 Q: And I take it that you would expect that 21 if this were brought -- or if Mr. Rollock looked closely 22 enough at it, he would have had the same question that you 23 had, him being the composer of that letter, under your name? 24 A: Yes. 25 Q: Am I right in making the observation,

81
  1  based on everything we've heard to date, that MFP was
  2  interested in establishing strong relationships with key
  3  decision makers at the City of Toronto?
  4                 A:   Absolutely.
  5                 Q:   And entertaining those key decision
  6  makers was part of the strategy of MFP to l -- to establish
  7  and nurture those strong relationships?
  8                 A:   Entertaining was part of the process to
  9  better -- to build a better relationship with the client, to
 10  understand their needs which is, you know, in a marketing
 11  sales environment pretty standard.
 12                 Q:   So let me -- let me see.  When you take a
 13  client to a hockey game, that gives you an opportunity as a
 14  MFP sales representative to understand the client's needs?
 15                 A:   Yes.
 16                 Q:   Assume for a moment that all the client
 17  does is watch the game?  How does that assist in establishing
 18  the client's needs?
 19                 A:   That's the gamble you take.
 20                 MADAM COMMISSIONER:   That's the gamble you
 21  take?
 22                 THE WITNESS:  Yes.            
 23  
 24  CONTINUED BY MR. RONALD MANES:   
 25                 Q:   You would agree with me, however, you

1 haven't really lost your investment there because it is part 2 of relationship building? 3 A: Of course. 4 Q: All right. Let me turn you to Volume 1, 5 Tab 2. 6 7 (BRIEF PAUSE) 8 9 Q: This is Document 23260 and this is, of 10 course, included in your volume of documents. I take it you 11 had -- you reviewed all these documents, Ms. Payne? 12 A: The night before last, yes. 13 Q: All right and this particular document, 14 is that a document that rang familiar to you on your review? 15 A: Vaguely. 16 Q: All right. Can you tell me from your 17 recollection, what were the circumstances under which this 18 document was written and who wrote it? 19 A: It would have been prepared for the 20 Investment Committee. That is my understanding. 21 Q: And we know that it -- it would be 22 prepared around the time that the City issued it's -- it's 23 RFP. So it would be around May 31 or -- or after. 24 It starts out: 25 "The City recently issued an RFP for

1 leasing of nine thousand (9,000) Dell 2 desktops..." 3 Et cetera. 4 A: Yes. 5 Q: Now, that would be this RFQ that is 6 subject matter of this inquiry? 7 A: Yes. 8 Q: All right. And that RFQ we know was 9 issued May 31, 1999. 10 A: Yes. 11 Q: And we know this says the City recently 12 issued the -- an RFP for leasing nine thousand (9,000) Dell 13 desktops. So we know that this was prepared for the 14 Investment Committee, according to your evidence, very recent 15 -- recently after that issuance. Correct? 16 A: Yes. 17 Q: Now, do you recall reading this as a 18 member of that -- of the Investment Committee? 19 A: Yes. 20 Q: And in this first paragraph it says, if 21 you go partway down: 22 "MFP, over the last six (6) months, has 23 been the driving force in convincing the 24 City to lease." 25 First, I don't know if I've established who --

1 who would have written this? 2 A: Rob Wilkinson and Dash Domi. 3 Q: All right. 4 A: I'm not sure who actually wrote it but 5 those two (2) people would have been working on it. 6 Q: They're coming to the Investment 7 Committee -- 8 A: That's right. 9 Q: -- to make an investment. 10 A: So they would have to have put this 11 together. 12 Q: Now, the Investment Committee, before I 13 asked you these questions, do they take and did you, in 14 particular, take these -- this memo seriously? 15 A: Yes. 16 Q: It states: 17 "MFP, over the last six (6) months, has 18 been the driving force in convincing the 19 City to lease." 20 Can you tell me what were the -- what is your 21 understanding of MFP over the last six (6) months being the 22 driving force in convincing the City to lease. 23 What had MFP done to merit that statement? 24 A: MFP had done a number of presentations to 25 individuals within the City, to show the benefits of lease

1 versus purchase. 2 Q: And after those presentations I take it 3 there would be feedback to you and other representatives of 4 the count -- company, as to how everything went? 5 A: Yes. 6 Q: And when this statement was made to you 7 as a member of the Investment Committee, being asked to make 8 a -- an investment in this proposal, that MFP over the last 9 six (6) months has been the driving force in convincing the 10 City to lease, that is something that you could, from your 11 own standpoint, agree with? 12 A: I was supporting the sales force in the 13 fact that they felt that they had convinced the client that 14 leasing made sense. 15 Q: All right. When I say you agree with, 16 you had -- you had no reason to disagree with that 17 representation? 18 A: No. 19 Q: All right. And that's based on 20 everything that you knew from your intelligence gathering in 21 your job and your sales representatives? 22 A: Well the fact that the City came out with 23 an RFP for leasing shows that we had encouraged them to look 24 at that as an option. 25 Q: But there were other -- other -- other

1 companies that were competing with you, to say the least, why 2 is it that you were able to endorse this -- this statement 3 that it was MFP that had been the driving force? 4 A: This document is an internal document, 5 which goes through the Investment Committee, to convince the 6 Investment Committee to over -- or invest or potentially 7 over-invest in this opportunity. This is a sales document 8 that is trying to convince the senior management team of MFP 9 to invest in this opportunity. 10 Q: So I take it what you're saying is that 11 as far as Mr. Wilkinson and Mr. Domi were concerned, MFP had 12 been the driving force in convincing the City to lease? 13 A: Yes. 14 Q: Would they be in the best position to 15 know something like that? 16 A: Rob Wilkinson was a number one (1) 17 employee of -- of MFP, a very capable individual. We -- he 18 team -- he teamed up with Dash Domi. If Rob Wilkinson felt 19 that this was an opportunity, we would support him. 20 Q: And given that Rob Wilkinson was making 21 this statement, there was no reason or no sense that this 22 statement wasn't dead accurate? 23 A: I wouldn't say dead accurate. I would 24 suggest that we were confident that this statement was 25 accurate.

1 Q: All right. And the next statement: 2 "We have developed very strong 3 relationships with Tom Jakobek, Councillor 4 and Budget Chief, Wanda Liczyk, CFO and 5 Treasurer, and Jim Andrews, Executive 6 Director of IT." 7 Were you equally confident that that statement 8 was accurate? 9 A: We were confident that they had developed 10 strong relationships. 11 Q: And were you confident that they had 12 developed strong relationships with Jakobek, Liczyk and 13 Andrews? 14 A: From the way this is written, we believed 15 that -- that there were -- there was strong relationships. I 16 mean, we had many of these presented by the way. We would 17 have three (3) or four (4) of these presented each week to 18 the Investment Committee, these -- these were projects right 19 across North America. 20 And -- and one (1) thing that I -- I really am 21 proud of in -- in being part of that MFP team, we worked with 22 the sales force, we trusted the sales force to come in and 23 tell us the truth. We couldn't be there looking at them 24 every day, saying, now are you sure you've met the right 25 people. These are -- these are highly skilled individuals.

1 Q: And these are people that you're 2 accountable for? 3 A: That's right. 4 Q: These are your people? 5 A: Yes. 6 Q: