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

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

1 TABLE OF CONTENTS 2 Page 3 4 Exhibits 4 5 6 Brendan Power, Resumed 7 Continued Examination-in-Chief by 8 Mr. Patrick Moore 5 9 Cross-Examination by Mr. Hugh MacKenzie 120 10 Cross-Examination by Mr. William Anderson 157 11 Cross-Examination by Mr. Fraser Berrill 168 12 13 Certificate of Transcript 181 14 15 16 17 18 19 20 21 22 23 24 25

1 EXHIBITS 2 Exhibit No. Description Page No. 3 4 23 VOLUME IV Bound Document titled 110 5 "Brendan Power" 6 Tabs 1-124 7 23 VOLUME III Bound document titled 158 8 "Brendan Power" 9 Additional Tabs 52 - 56 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 session. 4 Please be seated. 5 MADAM COMMISSIONER: Good morning. 6 MR. PATRICK MOORE: Thank you, Commissioner. 7 8 BRENDAN POWER; Resumed 9 10 CONTINUED EXAMINATION-IN-CHIEF BY MR. PATRICK MOORE: 11 Q: Mr. Power, we left off yesterday, I 12 believe talking about your involvement with Mr. Loreto in his 13 effort toward producing a letter for Canada Life at the 14 request of MFP. Do you recall that discussion? 15 A: Yes, I do. 16 Q: And -- and we spoke then of the discussion 17 that you had with Mr. Loreto in mid-February of the year 18 2000, which was arising from a memo at Tab 33 in Book 1, 19 document 12586. 20 And taking your mind back to that time, Mr. 21 Power, can I just ask you, did that mark the end of your 22 involvement in the work at the City toward generating that 23 letter for Canada Life? 24 A: I believe it did. I don't think I recall 25 seeing the final letter until some time -- I don't think I

1 ever saw a draft of it. 2 Q: All right. Now, since we're in the year 3 2000, I wonder can I ask you are you now aware that later in 4 the year 2000, July in fact, the -- certain of the leases 5 were re-written, that is 8381, program agreements one (1) and 6 two (2), were re-written into 838 series leases, five (5) 7 through nine (9)? 8 You're aware of that now, are you? 9 A: I'm aware of that now, yes. 10 Q: And can I ask you, were you aware of that 11 at the time of the re-write in July of 2000? 12 A: I can't recall being involved in it, I'm 13 not even sure if I was aware of it at the time. 14 Q: All right. And from that, we can take it 15 that if there were discussions or deliberations between City 16 staff and MFP leading toward the re-write, those are not 17 discussions that you have any recollection of being involved 18 in? 19 A: I -- I don't think I was involved in that. 20 Q: All right. Now, if we could move you back 21 in time chronologically, to August of 1999, at this time the 22 -- the Council resolution was in place and the discussions 23 were essentially complete around the form and content of the 24 master lease and related agreements. 25 And if I can take you beyond that then to

1 August 23rd of 1999, and ask you to focus on the document at 2 Tab 85 of Book 1, and that's our document 15642. 3 And this takes us into a new field, Mr. Power, 4 this has to do with the administration at the City of the 5 leases, once they are put in place. Are you with me at Tab 6 85? 7 A: Yes, document 16188? 8 Q: Sorry -- 85 should be document 15642, in 9 Book 1. 10 MADAM COMMISSIONER: You might be in Book 2, 11 Volume 2, it says Volume as opposed to Book. Mr. Moore calls 12 it book, but it says volume. 13 Are you in the right one (1)? 14 THE WITNESS: I think so. 15 MR. PATRICK MOORE: Let me -- 16 MADAM COMMISSIONER: That's probably the right 17 one (1) then. Tab 85. 18 19 (BRIEF PAUSE) 20 21 THE WITNESS: Tab 85, Oracle pricing reduced 22 dramatically. 23 MR. PATRICK MOORE: No -- 24 MR. BRYAN MCPHADDEN: No if you look -- you 25 have to look at the Tabs as they appear from the front.

1 Because if his binder is anything like mine, some Tabs were 2 used and then covered over. 3 If you look at them from the backside, it 4 won't -- you'll have one (1) or more Tab 85's. 5 6 (BRIEF PAUSE) 7 8 THE WITNESS: Okay. 9 10 CONTINUED BY MR. PATRICK MOORE: 11 Q: All right. So, this is an e-mail which 12 appears to go from you to Ms. Viinamae, on August 23, 1999 13 with Mr. Andrew as another addressee and Kathryn Bulko, as a 14 c.c. recipient. Do you have that? 15 A: Yes, I do. 16 Q: And if reads in the text from you that: 17 "I have attempted to document information 18 and action plans today re: the MFP leasing 19 program. Please review and provide 20 feedback." 21 And to put that into context, you might wish 22 to flip over the page to the document 15643 at Tab 86, I&T 23 Products Leasing Agreement. 24 Firstly, can you confirm that the document at 25 Tab 86 is what you were referring to in your e-mail at Tab

1 85? 2 A: I suspect so, yes. 3 Q: Before we look at the document at Tab 86, 4 I wonder if you might just cast your mind back and see if you 5 can help us with why you were attempting to document 6 information and action plans regarding the MFP lease at that 7 time? 8 Was that something that Ms. Viinamae had asked 9 you to do, or something that you undertook to do of your own? 10 A: I think I was asked to do it and help 11 Kathryn as part of the start up of the contract -- 12 Q: All right. And so what -- I'm sorry. I 13 didn't mean to cut you off. 14 A: No, that's fine. 15 Q: And so why were you asked to do that? Was 16 that something that was grounded in your experience in 17 managing IT contracts for leasing at the province? 18 A: That and I had some familiarity with the 19 MFP process and I guess, there weren't enough -- a lot of 20 other people around, so. 21 Q: And so what was it that you understood 22 your role to be in this initial stage before, as we now know, 23 any equipment was actually put on lease? What was your role 24 to be in the administration process? 25 A: I was to help them set up a process

1 whereby they could get the equipment in, facilitate the 2 payment that went through MFP and then subsequently pay MFP. 3 Q: And there'd two (2) prongs to this, I'd 4 suggest, Mr. Power. One would be dealing with the papering 5 of the sale and leaseback transaction and making sure it 6 found its way properly on to an appropriate lease -- 7 A: Hmm hmm. 8 Q: -- and secondly, there'd be the 9 acquisition of new hardware and software which had not 10 already been purchased by the City? 11 A: That's correct. 12 Q: And in the document at Tab 86, you set out 13 at the top, and I'm not going to take you to every bullet 14 point but you set out at the top certain assumptions. These, 15 I take it, would be areas of interest that would need to be 16 addressed and you say that the moves, in the first bullet 17 point, do not generate any financial impact and I'm wondering 18 what you meant by that? 19 Was this a move of products from products 20 purchased back on to a lease? 21 A: I'm not sure. I would assume it would 22 mean the move of products from location to location. 23 Q: All right. And the next point says there 24 would be no rolling windows planned at this point for 25 upgrades and you told us something about that term yesterday

1 but in the context of your involvement in the administration 2 of the leases, what were you trying to convey to the reader 3 there? 4 A: That -- I'm just guessing. I would assume 5 that the -- the point here is that the equipment that has 6 been leased won't be changed and will only go for the term of 7 the lease. 8 Q: All right and farther down you have a 9 bullet point that reads: 10 "Products will be bought out at original 11 purchase price" 12 Do I take it correctly that that refers to 13 sale and leaseback products? 14 A: That's correct, yes. 15 Q: And the intention there was to have the 16 products put on lease at the same price that the -- by way of 17 asset value, at the same price that the City had acquired 18 them from the original vendors? 19 A: That's correct. 20 Q: So that there'd be no additional profit 21 through this process to MFP? 22 A: That's correct. 23 Q: And there's no reference there -- 24 A: Lower loss of value to the City. 25 Q: Exactly and there's no reference there to

1 the provincial sales tax and so can we conclude that at this 2 point in August of '99, it was not on your radar screen to 3 alert Ms. Viinamae or Ms. Bulko to seeking back provincial 4 sales tax paid? 5 A: That's correct. 6 Q: Centralized administration of lease is the 7 next point and that, I take it, is what you were telling us 8 before that Information and Technology through the Contract 9 Management Office would centrally manage the IT leasing for 10 all City needs? 11 A: That's correct. 12 Q: And the next one is: 13 "Approval for acquisitions, upgrades/new 14 required from computer operations and 15 telecommunications" 16 And I'm wondering if you can firstly tell us 17 what is computer operations and telecommunications? That's a 18 term we haven't come across yet. 19 A: That's the part of the IT organization 20 that dealt with, I guess, essentially those things, computer 21 operations and telecommunications. I mentioned Michael 22 Franey's name a couple of time. He was the director in 23 charge of that particular group. They had the Data Centers, 24 and Network Control Centers -- 25 Q: And --

1 A: -- reporting to them. 2 Q: And is the point of this assumption, Mr. 3 Power, that departments would make out a business case for 4 needs, and get approval for that from this group, Mr. 5 Franey's group, and then once the need had been approved then 6 the department would come to the Contract Management office 7 to implement acquisition? 8 A: That's -- that was the plan, yes. 9 Q: All right. 10 "Requests will require justification and 11 funding options." 12 That one is italicized where the others above 13 it had not been. Is there some particular significance to 14 that bullet point, sir? 15 A: I'm guessing back here, but I -- the 16 intent was, that the requests would be originating in the 17 individual departments and coming through the chain of 18 command that their -- the appropriate people would sign off 19 on it, and sign off that the funds were available in the 20 department for that particular acquisition. 21 Q: So that by the time the request found its 22 way to the Contract Management Office, the -- the CMO people 23 would know that the need had been address and justified and 24 signed off on by the appropriate people within the 25 department, by the people at Computer Operations and

1 Telecommunications, and that funding was in place within the 2 initiating department? 3 A: Yes. 4 Q: And the reason for that; was it that when 5 the acquisition was made and put on lease, that it would then 6 be possible to attribute the cost of that portion of the 7 lease back to the initiating department? 8 A: That's correct, yes. 9 Q: And that plan -- that was an assumption 10 that you were making, that was a goal that you were working 11 toward, but it was never achieved before you had -- before 12 you left the City in '01? 13 A: I don't think it -- part of it worked. I 14 don't know if it ever fully worked where the -- they were 15 recovering their expenses through budgets and getting money 16 back from the departments or not, I don't know. 17 Q: But that was the way things did work at 18 the Province, and it was a model that you were hoping would 19 be viable at the City? 20 A: It wasn't working quite that way at the 21 Province, but that was the way we tried to make it work at 22 the City, yes. 23 Q: All right. And then you go on to say in 24 your assumptions that: 25 "In March of every year, I&T will provide

1 projected estimate." 2 What did you mean by that? To whom would the 3 estimate be provided, and who would create it? 4 A: Well I think that would also be tied into 5 their budget process in terms of trying to estimate what -- 6 what their technical requirements would be for the year. 7 It would be reviewed by the various 8 departments and -- and try to match it up for an overall IT 9 plan for the year for the City. 10 I think that was the highlight or the high 11 point -- high part of that particular goal. 12 Q: But the -- I guess that -- the question I 13 need to ask is whether, in your mind, this assumption was 14 directed toward interdepartmental communications, that is 15 Information and Technology Division, providing these 16 estimates to other departments for informational purposes, as 17 distinct from providing estimates to Counsel? 18 A: I -- I don't think we were envisioning 19 Counsel as being a short term recipient of this information, 20 perhaps in a larger sense as part of a budgeting plan. 21 Q: By that point were you aware of the -- the 22 recommendation which was included in the report that went to 23 Counsel requiring that the Director of Information and 24 Technology and the Chief Financial Officer and Treasurer 25 report back periodically on leasing matters?

1 A: Yes. 2 Q: And were you part of any discussion about 3 how that would be accomplished and when? 4 A: No, I wasn't. 5 Q: But, just so that we're clear, that 6 requirement of Council was something totally different from 7 this projected estimate provision in your assumptions? 8 A: Well, it had different objectives, but, 9 there was no reason why it couldn't have been used to 10 facilitate that report back. 11 Q: In other words, if, in your assumption, 12 I&T did generate a projected estimate in March of every year, 13 you say, it could have been used by the appropriate personnel 14 to report back to Council? 15 A: It could have been, yes. 16 Q: All right. And then in November of each 17 year, your bullet point goes on to say that: 18 "I&T will provide projected actual." 19 Can you help me with an understanding of what 20 that means? 21 A: Well, simply it would be a reconciling of 22 what it was actually projected to be purchased during the 23 year and what actually did get purchased. 24 Q: So, the first one (1) was an estimate and 25 this is an actual -- a more precise tally?

1 A: Yes. 2 Q: And so this was a working assumption at 3 the -- at the point when you were starting into this process 4 in August of '99. Did it ever become a reality during your 5 time at the City until '01, that March and November reports 6 were generated by Information and Technology? 7 A: I don't recall if they did. 8 Q: And it wasn't your job to do them then? 9 A: No. 10 Q: If you move down the page to action plan, 11 the first number there says: 12 "Establish contract, master contract 13 schedule." 14 And the beside that it says: 15 "Sign off active." 16 And since your e-mail to Ms. Viinamae is dated 17 August 23rd, and from our discussion yesterday, we know that 18 the negotiation of the contract with MFP was well underway, 19 probably complete by then, does sign off active mean that -- 20 that -- that portion of the active -- of the action plan had 21 been achieved? 22 A: Either achieved or in the process of being 23 achieved, yes. 24 Q: All right. And farther down, we see 25 active beside products purchased and paid for in several of

1 the subsections. For instance, servers active, but for 2 desktops, partial handover is the term you use. 3 Can you help us with the distinction between 4 those two (2)? 5 A: No, I'm sorry, I don't know what partial 6 handover means at this stage. 7 Q: All right. And this is a working paper, 8 the beginning of a process, is that right? 9 A: Yes. 10 Q: If you turn the page then, you conclude 11 with, three (3) that I'll focus you on, action plan items. 12 Number four (4) for instance, says: 13 "Meet with Finance to confirm funding 14 sources, budget process." 15 Were you to be part of the process of meeting 16 with Finance? 17 A: No. 18 Q: Who did you envision would meet with 19 Finance and who at Finance would be part of that process? 20 A: Well, I would suspect Lana and perhaps 21 Kathryn would be part of that. 22 Q: And was this a meeting that, to your 23 knowledge, took place? 24 A: I believe there were some meetings, but 25 I'm not sure what the specific agenda was.

1 Q: And did you anticipate that on the agenda 2 would be included the provision -- the creation and provision 3 of projected and actual estimates of use, as we've discussed 4 under the assumptions? 5 A: I would assume so, but I don't know for 6 sure. 7 Q: And then, fifth point says: 8 "Create leasing guidelines for client 9 information." 10 Who was to have done that? 11 A: Well, I don't know who actually had the 12 ownership of it. I think it was Kathryn, but I helped her 13 with it. 14 Q: We'll come to some documentation shortly, 15 which addresses that. But, anyone else in the process, for 16 instance Ms. Viinamae, in the generation of this information? 17 A: Perhaps not in the generation of it but 18 more than likely in the reviews of it. 19 Q: All right and the -- the clients that this 20 client information was to be created for, would that be the 21 departments within the City of Toronto? 22 A: That's correct, yes. 23 Q: And finally, it says: 24 "Notify clients of leasing of guidelines" 25 That's -- that's the process by which the

1 departments were to be made aware of what the leasing 2 guidelines were going to be? 3 A: That's right, the communications plan. 4 Q: I'm not aware of any documentation or 5 communications touching on this point for another month or 6 so. If you'd go to Tab 91, we see a September 17, 1999 7 e-mail from you to Ms. Viinamae and it's our Document 15677. 8 From your recollection, did you have any 9 ongoing involvement through the remainder of the month of 10 August and in through the first half of September on this 11 subject? 12 A: I would suspect I did, yes. 13 Q: The document at Tab 91 refers to drafts of 14 forms and a letter to IT directors, asking Ms. Viinamae to 15 review and comment and if you move to Tab 92, there we seem 16 to see the draft as Document 15678. Is this a draft that was 17 prepared by you, sir? 18 A: Quite possibly, yes. 19 Q: And it's in the way -- it's drafted for 20 "Jim?". Would that be Mr. Andrew -- 21 A: Yes. 22 Q: -- to be the person whose name is -- that 23 this would be sent out under? 24 A: Yeah. It would be their decision as to 25 the signatory or whose -- who it would be coming from.

1 Q: All right and so at this drafting stage, 2 you weren't sure of that so you put the question mark in? 3 A: Right. 4 Q: And in the first line it reads that: 5 "Information and Technology is pleased to 6 announce a new leasing program for the 7 acquisition of all IT hardware and 8 software." 9 That's your language, I take it? 10 A: Yes. 11 Q: And that coincides with your understanding 12 that the RFQ and the approval of Council created a leasing 13 vendor of record at the City? 14 A: Yes. 15 Q: And then you go on to identify MFP as the 16 leasing provider and to list some of the benefits. The last 17 bullet point shown on that page says: 18 "A three (3) year lease term coinciding 19 with the manufacturer's warranty period, 20 resulting in lower maintenance costs." 21 By September 17th, 1999, we now know that no 22 leasing schedules had yet been put in place. Because you 23 used this language, can we take it that your understanding at 24 that point was that you'd be looking at a three (3) year 25 lease when they were put in place?

1 A: Yes. 2 Q: And finally, you're shown at the very 3 bottom of this page as the contact person and I wonder if you 4 can tell us what that means? What you anticipated in the way 5 of contact from clients at the City regarding this leasing 6 program? 7 A: Well, probably more detailed questions 8 about how it would work. 9 10 (BRIEF PAUSE) 11 12 Q: And at this point, being a draft, I take 13 it that you weren't contacted by any of the clients yet? 14 A: No, this wouldn't have gone out to 15 anybody. 16 Q: The draft documents which follow at Tabs 17 93, 94 and 95 and I'll just quickly give the document 18 numbers. At 93 it's Document 15679, Tab 94 begins with 19 Document 15680 and Tab 95 is Document 15683. 20 These, Mr. Power, appear to be draft documents 21 generated to facilitate approval and implementation of 22 leasing as you've described it, with the intent it be done on 23 the assumptions on your earlier documents, do I have that 24 right? 25 A: Yes -- yes.

1 Q: And did you create these -- these forms 2 yourself? 3 A: I wouldn't -- I'm not sure if I did them 4 exactly myself. I was working with Line Marks and Kathryn 5 Bulko, at the time, so -- 6 Q: But I asked the question because I 7 wondered whether these forms were drawn from forms in your 8 experience you had seen elsewhere, for instance, at the 9 Province? 10 A: No, primarily they were free-form things 11 we designed there. 12 Q: All right. And they were designed to 13 address the understanding that you knew clients had, which is 14 that this was an authorized procedure, authorized by Council? 15 A: Yes. 16 Q: And that's why, if you go to Tab 94, I'd 17 suggest, at the very top of the document, you set out there, 18 approval pursuant to delegated authority in clause 2 of 19 report 24 of the Strategic Policies and Priorities Committee, 20 entitled Year 2000 business continuity plan, adopted by City 21 Council on November 25, 26 and 27 of 1998. 22 A: Yes. 23 Q: And that would allow of, for instance, 24 sole sourcing of needs where applicable? 25 A: Yes.

1 Q: And on the following Tab, at Tab 95, the 2 MFP leasing delegated approval form, that reference is at the 3 top of it, that clause 2 of report 24, and then it goes on to 4 also include in the authorities, item 4, report 11, of the 5 Strategic and Finance Committee, entitled and then there's a 6 space, adopted by City Council on July 1999. 7 That's incomplete, but the intention, I take 8 it, was that you would be referring to the July '99 authority 9 of Council to use MFP as you understood, as the leasing 10 vendor of record? 11 A: That's correct. 12 MADAM COMMISSIONER: And it says there, 13 Strategic and Finance Committee, is that different from the 14 Policy and Finance Committee, or is that what it was intended 15 to be? 16 THE WITNESS: I think it's the same committee. 17 I believe, they changed names -- 18 MADAM COMMISSIONER: A couple of times? 19 THE WITNESS: -- a couple of times. 20 MADAM COMMISSIONER: Okay. I know they had 21 been the Strategic Policies and Priorities Committee before, 22 but did they go then to Strategic and Finance Committee 23 before they went to Policy and Finance Committee, no? 24 MR. GORDON CAPERN: I don't believe so, 25 Commissioner, I think the name change was simply directed to

1 Policy and Finance, but if that is a matter that we need to 2 follow up on, I will. 3 MADAM COMMISSIONER: I don't know if it's -- I 4 just noticed that it was different, so I don't know. 5 THE WITNESS: It was the same functioning 6 committee, as I understand it, regardless of what the name 7 was -- 8 MADAM COMMISSIONER: Right -- 9 THE WITNESS: -- they reviewed things prior to 10 going to Council. 11 MADAM COMMISSIONER: It was what we're now 12 calling P & F, Policy and Financial Committee? 13 THE WITNESS: I think so, yes. 14 MR. PATRICK MOORE: Policy and Finance, yes. 15 MADAM COMMISSIONER: Policy and Finance, 16 sorry. Even I'm getting it wrong. Okay. 17 18 CONTINUED BY MR. PATRICK MOORE: 19 Q: And this draft having been created 20 September 17th for Ms. Viinamae, had you by that point, 21 personally read the authority of Council, that is item 4, 22 Report 11? 23 A: Yes, I would have seen it. 24 Q: Now, if you move forward in time, but back 25 in your book, to Tab 83, document 15588.

1 (BRIEF PAUSE) 2 3 Q: We see another version of the draft that 4 you had earlier done. The text appears to be the same. This 5 time it's in the form of a letter addressed to Mr. James 6 Ridge. What was his position at the City at that time, as 7 you understood it? 8 A: I believe he was the Commissioner or 9 Acting Commissioner of one of the departments. 10 Q: All right. Now, it may be that nothing 11 much turns on this but just for accuracy's sake, if you can 12 also pull up Book 2 at Tab 30. Document 12248. 13 14 (BRIEF PAUSE) 15 16 Q: This is a memo. This is the same text of 17 the body, it appears, but this is in the form of a memo to 18 commissioners from Ms. Liczyk and Mr. Andrew. 19 And we understand from a communication we 20 received last week from the City that the -- that this memo 21 was attached to a brief e-mail from you on the 29th of 22 September 1999 to Ms. Line Marks. A document which we 23 intended to have added as Tab 48 in Book 2 and that may or 24 may not have been accomplished but, with that as background, 25 Mr. Power, are we on the same page here that at the end of

1 September, around the 28th, 29th, you had put this -- the 2 body of the text into memo form and into draft letter form -- 3 A: Yes. 4 Q: -- for distribution, as you've told us 5 earlier, to the clients of the City? 6 A: Yes. 7 Q: All right and do you know whether the -- 8 MADAM COMMISSIONER: I'm sorry. When you're 9 saying the clients of the City, what are you meaning by that, 10 Mr. Moore? 11 MR. PATRICK MOORE: Good point, Commissioner. 12 We talked about that briefly a moment ago but that would be 13 the departments and divisions within the City that might have 14 need to acquire information and technology assets on lease. 15 MADAM COMMISSIONER: So those are called 16 clients of the City? 17 THE WITNESS: No, they're ca -- no, they were 18 called clients of the Information and Technology Department. 19 MADAM COMMISSIONER: I see. Okay, okay. 20 THE WITNESS: They were -- they were internal 21 City people. 22 MADAM COMMISSIONER: Right. Okay, thanks. 23 24 CONTINUED BY MR. PATRICK MOORE: 25 Q: So the City was the department's client,

1 essentially? 2 A: The department was a client of the IT 3 division, yes. 4 Q: And can you tell us whether the memo to 5 Commissioners went out to Commissioners on or about the 30th 6 of September in the form that we see it at Book 2, Tab 30? 7 A: I don't know if it ever went out. 8 Q: Can you tell us whether the document in 9 its letter form at Tab 83, Book 1 went to Mr. James Ridge? 10 A: I don't know that. 11 Q: And after the 30th of September, did you 12 receive any communications or inquiries from any of the 13 departments or divisions in response to you being shown in 14 the final paragraph of each of those documents as the contact 15 person? 16 A: Not that I recall. It may have happened 17 but I don't remember it. 18 Q: And generally speaking, at that time, the 19 end of September of 1999, what were you doing within the 20 City? What was your job function there then? 21 A: Well, we still had the -- the year 2000 22 project to finalize. I was helping them with the program 23 administration, if you will, of the -- of the leasing part. 24 Q: And when you say the year 2000 work to 25 finalize, would that involve you in that process in the way

1 it had before -- 2 A: Yes -- 3 Q: -- that is the remediation of contracts -- 4 A: -- yes -- 5 Q: -- and generation of contracts that didn't 6 address Y2K issues? 7 A: Yes. 8 Q: Okay. So then on October 1st, an e-mail 9 was circulated, and you'll find it at Tab 70 in Book 1 and 10 it's document 14232, circulated by Ms. Viinamae to you and 11 others. 12 And it announces confirmation that, quote: 13 "We have approved the first MFP certificate 14 of acceptance. This covers the majority of 15 our hardware acquisitions to date for 1999 16 as outlined in the Council report 17 recommending leasing." close quote. 18 And I'm wondering who the we is there in the 19 first line of the text of this e-mail? Would that be Ms. 20 Viinamae herself? 21 A: I would suspect, and the group she was 22 working with to complete that transaction. 23 Q: And as you were working on contract 24 remediation, I'm wondering why did she chose to send this e- 25 mail to you?

1 A: I don't know. 2 Q: It goes on to say that: 3 "At a request by Finance the lease term of 4 sixty (60) months has been used for this 5 certificate." 6 Was that your first awareness of a sixty (60) 7 month term for any of the MFP leasing? 8 A: No, I think I was aware earlier. I can't 9 recall the circumstances of this, but I think I was asked to 10 write a letter to MFP requesting rates for sixty (60) months. 11 Q: And -- 12 MADAM COMMISSIONER: Just before we leave 13 that. On this is says, from Lana Viinamae and route to B. 14 Power. Does that mean it was routed from you or routed to 15 you? From you? 16 THE WITNESS: I'm sorry, Commissioner, I don't 17 understand that -- that e-mail system anymore. Maybe I did 18 when I was there, but I think we were using a couple of 19 different mail systems. 20 MADAM COMMISSIONER: Okay. 21 THE WITNESS: So, I don't know specifically 22 what -- 23 MR. GORDON CAPERN: I may be of some help, 24 Commissioner, we've have a couple of discussions about this 25 with people in the City.

1 We understand that the to and c.c. indicators 2 on the left side are -- accurately reflect whether the people 3 were addressees of the e-mail. 4 The route simply identifies the mailbox from 5 which it was taken, when it was produced to KPMG. So, in 6 other words -- 7 MADAM COMMISSIONER: I see. 8 MR. GORDON CAPERN: -- if it was -- this would 9 have been generated from either Mr. Power's -- 10 MADAM COMMISSIONER: -- e-mail -- 11 MR. GORDON CAPERN: -- e-mail box or 12 alternatively from the City's archives of that mailbox. 13 MADAM COMMISSIONER: Okay. 14 MR. GORDON CAPERN: That's my best 15 understanding of it, but if that's wrong, we'll let you know. 16 MADAM COMMISSIONER: Okay. Thanks. 17 MR. GORDON CAPERN: Which is also why, 18 incidentally, the header contains the in part, that gives 19 further indication of the mailbox from which it's been 20 obtained. 21 MADAM COMMISSIONER: Thank you. 22 23 CONTINUED BY MR. PATRICK MOORE: 24 Q: So, Mr. Power, if that information is 25 accurate, you would not have been a primary recipient of this

1 e-mail, whereas Jim Andrew, would have been, but, you would 2 have received this as a carbon copy recipient? 3 MADAM COMMISSIONER: Without the carbon, given 4 the computer? 5 MR. PATRICK MOORE: Yes -- a c.c. recipient, 6 whatever that means. 7 8 CONTINUED BY MR. PATRICK MOORE: 9 Q: And was it your practice at the time, Mr. 10 Power, to read e-mails that came onto your computer if you 11 were not shown as the primary, but rather as the c.c. 12 recipient? 13 A: I would read any mail that came from Lana, 14 for sure. 15 Q: All right. So, you had been asked to -- 16 to get some sixty (60) month rates. At the time that you 17 were asked, were you aware that the leasing would involved a 18 sixty (60) month term rather than a thirty six (36) month 19 term, or was it just requesting a rate so that a decision 20 could be made? 21 A: At that point, it was just requesting a 22 rate. 23 Q: And when you got -- did you get a rate and 24 give it to Ms. Viinamae? 25 A: Yes.

1 Q: And did you have any other involvement 2 after that -- 3 A: Not that I recall. 4 Q: All right. And do you recall receiving 5 this e-mail and noting on it, reference to a sixty (60) month 6 term? 7 A: I don't -- I don't know what my reaction 8 was. I may have already known from some other source or -- 9 at the time. 10 Q: I'm wondering whether you had any 11 discussion with Ms. Viinamae in which you expressed your view 12 that the useful life expectancy for, for instance, desktops 13 approximated three (3) years rather than five (5) and that 14 therefore you would recommend a three (3) year term for 15 desktops? Did you have that kind of conversation? 16 A: I think we had that conversation several 17 times, yes. 18 Q: And when you found out, whether it was 19 before or after October 1, 1999, that desktops were being put 20 on a five (5) year lease term, did you express your concern 21 that that might increase the cost of the overall leasing 22 program, including maintenance costs, and that it ought not 23 to be done? 24 A: Well, that would have been part of any 25 conversation we would have had before. After the deal had

1 been done, I don't think I went back and reiterated any 2 position that I had previously. 3 Q: Okay and the statement of the position 4 that you had, that is favouring a three (3) year term for, 5 for instance desktops, did that involve only Ms. Viinamae or 6 did it involve Mr. Andrew or others? 7 A: It may have. It -- it was, at times, a 8 fairly general discussion so I don't recall everybody who was 9 involved with it. 10 Q: Can we go to Tab 71. This moves us 11 forward a few days in October of 1999 and this is an e-mail 12 which comes to you -- it appears originally, if you go to the 13 bottom of the page, from Connie to you and it reads: 14 "As per your request to Dash Domi, please 15 find outlined below the lease rate factors 16 for the period of October 1, 1999 to 17 December 31, 1999." 18 And you see those set out? 19 A: Yes. 20 Q: Now, you and I talked about those. We 21 identified them as appearing in Exhibit 18. That is the 22 master lease Volume 3 at Tab 37. Ultimately they were set 23 out in the lease rate factor sheet and signed off on for the 24 City by Ms. Viinamae and you told us that you -- about your 25 involvement in that process but this is a reference to a

1 request from you to Mr. Domi. So can you tell us about -- 2 about that? Why did you seek out Mr. Domi to request this 3 information? 4 A: Well, this was, as I just mentioned, the 5 request to me to get a sixty (60) month lease rate from MFP 6 and Mr. Domi was our prime point of contact. 7 Q: Had you met him by this point? 8 A: Yes. 9 Q: And the -- the Connie, if we look at the 10 header lines farther up in the top third of the page, is 11 Connie, C-O-N-N-I-E, Johns, J-O-H-N-S and she appears to have 12 an MFP e-mail address. 13 Did you know her to be an MFP employee? 14 A: I don't know her. 15 Q: In any event, she provided you with 16 information on lease rates and did you have discussions with 17 Mr. Domi about -- about the lease rates? 18 A: No, not that I recall. 19 Q: And also referenced in the header farther 20 up is Mr. Wilkinson as someone receiving a c.c. of this. Did 21 you have discussions with Mr. Wilkinson that you can recall, 22 around October 6th, 1999, about MFP's lease rates? 23 A: Not that I recall, no. 24 Q: So you provided the lease rates in this 25 form, that is as information, to Ms. Viinamae. Were you then

1 involved further between this point and the point when she 2 signed the lease rate factor sheet, the MFP document? 3 A: No. 4 MADAM COMMISSIONER: Just so I understand that 5 then, she asked you to get lease rate factors for sixty (60) 6 days -- sixty (60) months? 7 THE WITNESS: Yes. 8 MADAM COMMISSIONER: You did; you gave it to 9 her, and then you had no further involvement with the concept 10 of sixty (60) months until she signed the -- the MFP master 11 lease, is that right? 12 THE WITNESS: That's what I recall, yes. 13 MADAM COMMISSIONER: Okay. Can I just ask you, 14 sorry, -- 15 THE WITNESS: Hmm hmm. 16 MADAM COMMISSIONER: -- and if Mr. Moore, if 17 you're going there, then let me know. 18 I'm just wondering, given your expertise with 19 the Provincial Government and all the RFP's that you had gone 20 through there, would it have been your view, as someone with 21 that kind of background, that when the City had tendered the 22 RFQ for a three (3) year period, that if they were now going 23 to expand that to five (5) years at this early stage, would 24 there -- would you normally have seen a need to re-tender or 25 not?

1 THE WITNESS: Well, the -- the rational for 2 doing those kinds of things was interpreted as being in the 3 Counsel Report. The change to the recommendation that was 4 made by the Finance Committee before it got to Counsel. 5 MADAM COMMISSIONER: The so-called flexibility 6 clause? 7 THE WITNESS: Yes, and that's what was being 8 used, my understanding, to -- to justify -- 9 MADAM COMMISSIONER: I understand that -- 10 THE WITNESS: -- the report, yeah. 11 MADAM COMMISSIONER: I understand that that 12 was what was being used. I'm wondering about you, Brendan 13 Power, as someone who had the experience in the Provincial 14 Government for all those years, would you have expected 15 something like this should have been re-tendered if it 16 changed the term from a three (3) to a five (5) year? 17 THE WITNESS: Yeah, in my view it probably 18 should have been. 19 MADAM COMMISSIONER: Did you mention that to 20 anybody at the City, did you have any discussion with anyone 21 at the City to suggest that maybe they should consider re- 22 tendering it? 23 THE WITNESS: I don't recall any formal 24 discussion about it, we may have had some conversations, but 25 I wouldn't -- I don't recall putting it forward as a

1 proposal. 2 MADAM COMMISSIONER: Did you tell them that, 3 for example, that if this had been done at the Province that 4 they would feel that there was a need to re-tender, if that 5 were, in fact, the case? 6 I don't know if that's the case or not, but I 7 take it from what you're saying, having had the experience at 8 the Province you felt that there probably should have been a 9 re-tendering? 10 THE WITNESS: Yes. 11 MADAM COMMISSIONER: And so, did you say to 12 the City, well the Province has been doing this for a while 13 if they were confronted with something like this they would 14 feel a need to re-tender? 15 THE WITNESS: But the rebuttal was always that 16 we had the approval for the sixty (60) months. 17 MADAM COMMISSIONER: I understand that. I'm 18 just asking if you ever said that to any of the City people 19 because you're a sort of -- you're more of the expert in that 20 area, if I -- if I might put it that way? 21 THE WITNESS: I didn't put it to them in any 22 formal sense, no. 23 MADAM COMMISSIONER: Okay. Did you sense that 24 they were coming -- that they were wanting any kind of 25 direction from you, or were they looking to you as someone

1 who had that kind of expertise in leasing or as a leasing 2 consultant? 3 THE WITNESS: Not at that stage. The -- as I 4 understood it, the chief discussions and activities going on 5 were all around the finance. 6 Like, we've committed to this method of doing 7 things and how do we now finance it. So, I think it was 8 driven more by a -- a financial need than a technology issue. 9 MADAM COMMISSIONER: And where were you 10 getting that feeling from? 11 THE WITNESS: Just from the discussions in the 12 meetings, some meetings I attended, and comments from -- from 13 Lana. 14 MADAM COMMISSIONER: Okay. All right, thanks. 15 I don't know if you were -- if I usurped where you were going 16 Mr. Moore, or if you were -- 17 MR. PATRICK MOORE: Quite all right, 18 Commissioner. 19 20 CONTINUED BY MR. PATRICK MOORE: 21 Q: There's one other component to this which 22 we discussed earlier in your evidence, Mr. Power, which may 23 also bear on your decision, or your thought process about 24 whether this was authorized. 25 The flexibility clause is one point, but I

1 think you also told us that you thought that MFP had been 2 authorized to be the leasing vendor of record. 3 And when you have a leasing vendor of record, 4 you don't need to go back and re-tender if you make changes 5 in the -- in the arrangement. Do you remember telling us 6 that? 7 A: Well, I don't know if I worded it that 8 way. But this would be a significant change -- you know, 9 going -- they were changing the whole approach, even MFP's 10 pricing structure wasn't geared to a sixty (60) month program 11 when they first bid. 12 So, if you change those kind of parameters and 13 put it back on the street again then the whole dynamics 14 change. 15 Q: You level the playing field for all of the 16 bidders? 17 A: Yes. 18 Q: All right. And is your answer on the -- 19 on the three (3) to five (5) year lease term, the wisdom of 20 re-tendering, the same as it would be when you consider the 21 re-write in July of 2000. Should that have been re-tendered, 22 in your view? 23 A: No, that -- I'm not too familiar with what 24 the re-write entailed. It -- was it just re-structuring of 25 the schedules into different orders. I don't know just --

1 I'm not completely familiar with it so -- 2 Q: Well, if you're not, that's fine. 3 MR. PATRICK MOORE: May I just address one (1) 4 thing, Commissioner, when you were speaking with Mr. Power, 5 you made a reference I think to Ms. Viinamae signing off on 6 the master lease. 7 Just for clarity of the record, I think we've 8 established she didn't sign the master lease, but rather the 9 lease rate -- 10 MADAM COMMISSIONER: Okay -- 11 MR. PATRICK MOORE: -- schedule and other 12 schedules. 13 MADAM COMMISSIONER: Thank you. No, that's my 14 error. 15 MR. PATRICK MOORE: All right. 16 MADAM COMMISSIONER: Thank you. Now, just 17 with respect to your last point, Mr. Moore, you'd asked Mr. 18 Power about the July 2000 re-write, and whether or not that 19 should have been re-tendered. 20 I think in fairness to Mr. Power, it might be 21 useful to let him know what that re-write was, so that he'd 22 be able to then -- because he was working there, at the time. 23 Right -- Mr. Power, you were there still in 24 July 2000? 25 THE WITNESS: Yes.

1 MADAM COMMISSIONER: And were you involved at 2 all in any of that re-write or do you know what that -- do 3 you know what Mr. Moore is talking about? 4 THE WITNESS: I think just generally, since 5 it's been mentioned here before, but I don't know the details 6 of it. 7 8 CONTINUED BY MR. PATRICK MOORE: 9 Q: I told you earlier today that among the 10 details of it, was that the first schedule which was 8381, 11 put in place in October of 1999, a very substantial schedule 12 as you know, together with program agreements one (1) and two 13 (2), were collectively re-written, into 838, schedules five 14 (5) through nine (9). 15 And among the things that that did, is that it 16 broke out desktops from servers from other components, into 17 separate schedules. 18 Now, if there was a financial consequence to 19 that re-write and I understand that you're not familiar with 20 this, but if there was, would there, in your view, be a need 21 to re-tender before re-writing? 22 A: It seems to me like something that would 23 be allowable under the terms of the agreement. 24 Q: Why do you say that, sir? 25 A: It was simply a re-structuring for perhaps

1 administrative purposes. It wouldn't be any significant 2 benefit to MFP in doing that. I don't know. I'm just 3 guessing at it to how it was done. 4 But if they had a massive agreement for a five 5 (5) year term, it would probably make more sense to break it 6 up at some point into, you know, assets that are going to be 7 really there for long term or assets that may fail and need 8 to be replaced or creates (phonetic) to them in a shorter 9 term, things like printers and fax machines and those kinds 10 of things. 11 Q: Well, as the Commissioner points out, all 12 of this happened in about July of 2000, at a time when you 13 were still at the City. I'm curious to know why, in your 14 best estimate, you weren't consulted in the process leading 15 to the re-writes? 16 A: I don't know why. 17 Q: What were you doing for the City in June 18 and July of 2000? 19 A: I was involved with a couple of other 20 projects for them. I don't remember exactly. 21 We had other RFPs that were being developed 22 that I was working on that, finishing up the year 2000 23 project work and working on a couple of other contracts with 24 -- with Oracle in terms of -- as a result of an RFP. I'm 25 guessing. I can't think, straight out, the whole summer what

1 I was doing but there were a number of major projects that 2 were underway. 3 Q: And you were there and actively involved 4 in them? 5 A: Yes. 6 Q: And so I suppose what I'm wondering then, 7 if you had been called upon, if you had been asked, could you 8 have served on a team looking at the wisdom of re-writing the 9 leases? 10 A: I probably could have, yeah. 11 Q: But you don't have any recollection of 12 discussing that with Ms. Viinamae, Mr. Andrew, or anyone 13 else? 14 A: No. 15 Q: All right. If we could return to the 16 development of the contract management process and move to 17 Tab 72 then, document 014245. 18 This is November now, November 4 of 1999, and 19 Ms. Leggieri is writing to you and Ms. Marks asking for your 20 review of attached documents and it appears she's also asking 21 you to provide the motion as adopted by Council, that would 22 be the July 27th resolution. 23 And that's, no doubt, to assist in completing 24 the draft document reference to the authority which you'll 25 see at Tab 74 is still in an incomplete form at the top of

45
  1  that form.  That's our document 14251.  
  2                 A:  Yes.
  3                 Q:  And it asks that you make any changes and
  4  that you let Ms. Leggieri know what you think.  Did you make
  5  changes and did you let Ms. Leggieri know what you thought in
  6  about November 4th of '99?
  7                 MADAM COMMISSIONER:  Do we know what was
  8  attached exactly?
  9                 MR. PATRICK MOORE:  Yes.  I'm coming to that,
 10  too, Commissioner.  Thank you.
 11                 MADAM COMMISSIONER:  Okay.  Well, I think in
 12  fairness, we should probably put that to him because I -- if
 13  you gave me a document like this and asked me to look at it
 14  all these years later, I wouldn't know if I --
 15                 MR. PATRICK MOORE:  Good point.  If you -- if
 16  you look at Tab 73.
 17                 MADAM COMMISSIONER:  Yes.
 18  
 19  CONTINUED BY MR. PATRICK MOORE: 
 20                 Q:  Document 14246, "Business Rules".  Tab 74,
 21  the Contract Management Office form entitled "Information and
 22  Technology Division Leasing Approval Form", document 14251. 
 23  Tab 75, the Contract Management Office "Information and
 24  Technology Purchase Requisition", document 14252.  
 25                 That looks like it might complete the

1 attachments to the e-mail but perhaps you can help us, Mr. 2 Power, looking at them whether that's so. 3 A: Yeah, I would think that would be the 4 attachments. 5 Q: I don't see an e-mail going to back to Ms. 6 Leggieri which is why I asked the question I did. Did you 7 respond, did you make changes to this? Do you have a 8 recollection of doing that? 9 A: Well, I would have commented on it and let 10 her know whether I had any changes or not. She was right 11 next door to me so it may not have been an e-mail. 12 Q: Hmm hmm. And if you go then to Tab 73, 13 this seems to reinforce what we saw earlier on the 14 assumptions at the time that you were initiating this 15 process, part way down the first page, document 14246, you 16 say that: 17 "One (1) only purchases will not be leased 18 unless otherwise approved." 19 So, you're focussing on having proper approval 20 process in place, is that right? 21 A: That's correct. 22 Q: "And that equipment must be delivered and 23 received and acknowledged." 24 And you've put those in capital letters, or 25 Ms. Leggieri did, to reinforce the need for proper

1 documentation. Do I have that right? 2 A: Yes. 3 Q: I wonder what you meant by or what she 4 meant by: 5 "Must have a reasonable life expectancy." 6 Do you know what that bullet point refers to? 7 A: Yeah, I'm just trying to think of an 8 example of what -- like supplies shouldn't be used, shouldn't 9 be purchased on leased, and a reasonable life expectancy is 10 something that would be around for a couple of years. Not -- 11 not consumable goods. 12 Q: And that may be -- your view may be 13 reinforced by what you see under examples at the bottom of 14 the page, of equipment that will not be leased, toner and 15 cartridges, for instance. 16 A: Hmm hmm -- 17 Q: Whereas personal computers immediately 18 above that, printers and scanners are among the things that 19 are appropriate for lease under this program, is that right? 20 A: Yes. 21 Q: Okay. And then on page 3 of this 22 document, still at Tab 73, you see set out there certain 23 roles and responsibilities of the departments, the Contract 24 Management Office and of Purchasing. 25 And under the departments, it reads here that:

1 "They are to determine asset needs, funding 2 source and to find an acceptable supplier." 3 The first two (2) of those three (3), are 4 suggestions you had made as we saw in the earlier 5 correspondence. 6 So, I take it, you would have approved that? 7 A: Yes. 8 Q: And not suggested any changes. And then: 9 "The departments complete forms and forward 10 to the Contract Management Office." 11 Missing in that step, as I recall, is the 12 going forward to Mr. Franey's department. Was that still 13 contemplated, that his department would approve of the 14 departmental requests before the CMO became involved? 15 A: No, I think the process they were working 16 on was that the CMO's office would do the checks against the 17 technology standards for -- 18 Q: And that appears to be so, under the first 19 bullet point in the Contract Management office section which 20 says: 21 "Review and approval departments request 22 for leasing." 23 And what you're saying, Mr. Power, is that 24 that the Contract Management Office would then take on the 25 responsibility of approving the business need from a

1 configuration suitability standpoint? 2 A: Yes, that's correct. 3 Q: All right. But it would still rest with 4 the department to define the need and to find the budget 5 funding for the need? 6 A: That's correct, yes. 7 Q: Contract management would, as the second 8 bullet point suggests, manage the overall process -- 9 A: Yes -- 10 Q: -- including negotiating the lease 11 agreement on behalf of the department with MFP. Now, that 12 point interests me. 13 Does that mean that the Contract Management 14 Office would -- would contact MFP and negotiate program 15 agreements or the form and content of schedules to be put on 16 the master lease? 17 A: Yes. 18 Q: And tell me about the Contract Management 19 Office then, at this time, in November of 1999. How many 20 people staffed it? 21 A: I think probably three (3). 22 Q: And who were they? 23 A: It was Paula Leggieri, Kathryn Bulko and 24 another gentleman they brought in from another department. 25 His name I can't recall right now.

1 Q: Okay and did any of those three (3) to you 2 knowledge have any background training or experience in 3 negotiating contract documents with suppliers to the City? 4 A: Kathryn, perhaps. 5 Q: Was she a lawyer? 6 A: No. 7 Q: Was she legally trained, to your 8 knowledge? 9 A: No. 10 Q: And this -- these bullet points of 11 departmental responsibilities and Contract Management Office 12 responsibilities don't say that City Legal is to be consulted 13 or contacted before these negotiations of lease documents are 14 undertaken or during the process. Did it occur to you to 15 suggest that that might be a useful addition to this listing? 16 A: Well, I think the very in -- 17 inappropriately used sentence there. They weren't -- there 18 were no real leases to negotiate. 19 I think the negotiating with MFP at that point 20 was more the logistics of -- of how things would be acquired, 21 how we got the paperwork to them, how we got the sign offs 22 from the -- from the client at the end and then getting them 23 to generate the acceptance form. 24 So I think the term lease agreement is an 25 inappropriate use of the word there. At least in my

1 understanding of how -- of the processes that went on at this 2 stage. 3 Q: But of course there would be a lease 4 agreement in the form of a schedule -- 5 A: That's correct, yes. 6 Q: -- to the master lease arrangement and so 7 there would be need of execution of a formal lease document 8 by the City in order to effect this acquisition? 9 A: Yes. 10 Q: And so what this seems to be saying is 11 that Contract Management Office would negotiate or as you put 12 it, effect -- put in effect the lease documentation necessary 13 to make the acquisition? 14 A: Yes. 15 Q: All of that without involvement of City 16 legal? 17 A: That's correct. 18 Q: And then there's a bullet point that you 19 may be able to help us understand, second from the bottom 20 under the Contract Management Office section which says: 21 "Authorize Finance to pay MFP" 22 What does that mean? Who at the Contract 23 Management Office would authorize who at Finance to make 24 payments? 25 A: Well, the who at Finance I don't know but

1 they wouldn't allow any payments to take place until there 2 was a certificate of acceptance and it was concluded that the 3 equipment that was ordered was received and that the vendor 4 had been paid. 5 Q: And under the Purchasing involvement, the 6 point reads that: 7 "Purchasing approves the purchasing process 8 used for the selection of vendor" 9 What vendor does that refer to? Is that MFP 10 or the supplier of the hardware or software itself? 11 A: It would be the supplier of the hardware 12 or software. If it was purchased from one of them or it was 13 purchased outside of any other agreement, then Purchasing 14 people would be involved in it. 15 Q: So that would have nothing to do with the 16 placement of the acquisition on to an MFP lease? 17 A: No. 18 Q: If you move to the next page under the 19 Leasing program procedures, the second point says that the 20 department would locate a supplier of products and services 21 through existing vendors of record or through an RFP process. 22 Now, does that relate back to the involvement of Purchasing 23 and the acquisition of, for instance, hardware from the 24 hardware supplier itself? 25 A: Yes.

1 Q: So that's not a leasing issue, it's a 2 selecting of the product issue? 3 A: That's correct. 4 Q: Okay. And then the third point is that 5 the Department completes an Information and Technology 6 purchase requisition form, and forwards it to the Contract 7 Management Office. The requisition form is what we see in 8 draft, I take it, at Tab 75? 9 A: Yes. 10 Q: And similarly at point 4 here, at Tab 73, 11 the Department also completes an Information and Technology 12 Division leasing approval. And that's the document we see at 13 Tab 74? 14 A: Yes. 15 Q: In its current form, which we noted a 16 moment ago, is still incomplete in its reference to Council 17 authority; do you see that? 18 A: Yes. 19 Q: And just while we're on that subject and 20 so the record is clear, if you move to Tab 109, which we're 21 coming to shortly, we see the Information and Technology 22 Division leasing approval form, at document 31622, which 23 appears to be a later and now complete edition in that it 24 refers to the Council approval at the very top, with the 25 proper reference to the -- to the date?

1 A: Yes. 2 Q: And otherwise -- all right. So, other 3 than what we've talked about so far, Mr. Power, do you recall 4 any additional discussions that you had with Ms. Leggieri or 5 Ms. Viinamae about the development of this process and of 6 these forms in around early November of 1999? 7 A: You know, I -- I think I was working with 8 them to get the process working. 9 Q: We -- we see that you come back into the 10 process again in December, but I'm wondering whether there's 11 anything in particular that you can remember about what you 12 were doing, if anything, other than reading the draft 13 documents in November? 14 A: I can't remember, the time is kind of 15 fuzzy, but we were also at some point during this, 16 negotiating with the software company to make this work in an 17 electronic sense, through a work flow process. 18 It took up a lot of people's time and for no - 19 - no good outcome, because they didn't -- they just couldn't 20 make it work. 21 Q: It sounds to me, and please correct me if 22 I'm wrong, that you were a resource to the -- to Ms. Viinamae 23 and the three (3) people in the Contract Management Office at 24 this time, someone that they could refer draft documents to 25 that -- someone who could assist in the process in vetting

1 them. But it was -- it was not the case that you were 2 charged with the responsibility of making the Contract 3 Management Office happen? 4 A: No, that's correct. 5 Q: All right. So, between your involvement 6 in November and your next involvement in December, do we 7 assume correctly that you went back to doing other projects 8 for -- for the City in the IT Department? 9 A: Yes. 10 Q: And then you're drawn back into it, if you 11 go to Tab 107 in your book 1, brought back into it, it 12 appears, on December the 11th, by way of e-mail 13 communication, document 31620? 14 15 (BRIEF PAUSE) 16 17 Q: Again Ms. Leggieri is asking you to review 18 certain attached documents, which this time I will take you 19 to, and advise of comments and -- and changes, and she 20 references at the bottom, a meeting on Monday. 21 So, I take it that sometime shortly after the 22 date of this e-mail there was to have been a meeting, 23 presumably to discuss the form and content of the attached 24 documents. Now, was that your understanding at that time? 25 A: I would expect so, but I don't recall this

1 specifically. 2 Q: All right. Let's look then and clarify 3 the record on -- on what the attachments may have been. Tab 4 108 is a flow chart, document 31621. Tab 109 is the leasing 5 approval form, which we referred to a moment ago, document 6 31622. Tab 110 is the purchase requisition form, document 7 31624, and Tab 111 is the business rules, document 31625. 8 Can you confirm for us, Mr. Power, that those 9 are the attachments that the e-mail refers to? 10 A: I would sus -- I would think so, yes. 11 Q: And do you remember now reviewing these 12 attachments and making any specific response or suggested 13 changes to Ms. Leggieri? 14 A: I don't recall any specific response to 15 her, no. 16 Q: Do you have a recollection of attending on 17 the meeting that the e-mail refers to? 18 A: I may -- there were several presentations 19 of this material to client group, to the Senior Management 20 Committee and some I attended and some I did not, so I'm not 21 sure which one (1) is being referred to here. 22 Q: As you were involved in other matters, 23 other projects, at the time, what can you tell us was the 24 purpose of your attending the meetings that you did attend on 25 this subject?

1 A: Well, I don't know, probably just for 2 support or to -- 3 Q: As a resource? 4 A: -- use me as a resource. 5 Q: Around the same time, that is in December 6 of 1999, it appears that you may have had some discussions on 7 this same subject with Mr. Spizarsky. 8 And in that regard I'd ask you to look at Tab 9 126, which is a document that was referred to Mr. Pagano when 10 he gave evidence but is not yet in the database with a 11 document number. 12 And I apologize for the -- for the copying, 13 it's very difficult to read the top page, but it appears to 14 be a -- an e-mail from Mr. Spizarsky to Mr. Pagano, dated 15 December the 7th of 1999, and you'll see that you are 16 referred to in the fourth line, and I'll just try and read it 17 and you can correct me if I get it wrong. It says: 18 "Lou, perhaps you might recall that now 19 that the leasing contract has been put in 20 place for computer hardware and software, 21 the IT Division wants to put in place 22 procedures for Departments to follow when 23 they have requirements for computer 24 hardware and software. Lana and Brendan 25 Power are working on some draft procedures.

1 I have been giving them some tips on what 2 to include, following proper purchasing 3 procedures, with the understanding that 4 they will provide us with a revised draft 5 for our review. It sounds like they want 6 to meet on this, but I told them that Paul 7 and Dave should also be involved, because 8 as I understand it, there is an SAP tie-in 9 and they want to roll this out to all 10 Departments." 11 I hope I got that right. Is the SAP tie-in 12 the electronic meshing of information that you told us about 13 earlier that the Contract Management was hoping to put in 14 place? 15 A: No, the SAP -- it was a financial system 16 which had a purchasing module in it. And I think what they 17 wanted to do was have this process feed into the purchase 18 order generation system in the SAP financial system. At 19 least that's the way I would think it -- 20 Q: All right. And do you have a recollection 21 now, perhaps refreshed by looking at this document, of 22 meeting with Mr. Spizarsky of purchasing, with or without Ms. 23 Viinamae, to talk about the development of these forms and 24 processes? 25 A: Yeah, I recall being at at least one (1)

1 meeting with him there, yeah. 2 Q: If you go to the second page, at the very 3 bottom, it looks like that's an e-mail which doesn't show 4 you, as I can decipher it, as a recipient, but it does refer 5 to a meeting on December 9, 1999, on the Contract Management 6 Leasing -- Contract Management Office -- 7 MADAM COMMISSIONER: December 9 or 7? 8 MR. PATRICK MOORE: Mine looks like a 9. 9 MADAM COMMISSIONER: Oh, December 9, right. 10 11 CONTINUED BY MR. PATRICK MOORE: 12 Q: And do you know whether that was a date on 13 which you attended a meeting? 14 A: I couldn't say for sure. 15 Q: And do you have any specific recollection 16 of what input or dialogue you may have had with Mr. 17 Spizarsky, about the development of these forms? 18 A: Not specifically. I guess the intent for 19 us was to make sure that the purchasing department was 20 included in all of the steps of this process, where they 21 needed to be. 22 And to get from them assurances that the kind 23 of things that we're building into the processes wouldn't 24 cause extra work for them, or if they could suggest to us 25 things that would make their life easier going through it.

1 Q: You can't think of any examples off the 2 top of your head? 3 A: No, I can't at the moment. 4 Q: But, what interests me about the reference 5 to you and Ms. Viinamae in this e-mail and of dialogue with 6 Mr. Spizarsky, is that I took it from the various iterations 7 of the draft documents that we've gone through this morning 8 that it was Ms. Leggieri, principally, was the author of 9 those documents and then she would send them to you, for a 10 consultative review. 11 And so I'm wondering how it came to be that 12 you were put into a direct meeting with Mr. Spizarsky in 13 purchasing, rather than for instance, Ms. Viinamae and Ms. 14 Leggieri? 15 A: I don't know. 16 Q: And do you have any recollection of 17 conveying to Ms. Leggieri, the results of any discussions 18 that you may have had with Mr. Spizarsky, such -- so that the 19 forms could be revised to accommodate any input that he may 20 have had on behalf of purchasing? 21 A: I think I would have done that if she 22 hadn't been there. I don't recall meetings where -- under 23 what circumstances she wouldn't be there. 24 Q: And so you would anticipate that if 25 meetings were had that you were present at, she would have

1 been there and Ms. Viinamae would have been there. Would Ms. 2 Bulko have been there too? 3 A: Sometimes, yeah. 4 MADAM COMMISSIONER: Would Ms. Viinamae have 5 always been there or are you saying sometimes for her, as 6 well? 7 THE WITNESS: Sometimes for her, yes. 8 9 CONTINUED BY MR. PATRICK MOORE: 10 Q: So that's sometimes for Ms. Viinamae, 11 sometimes for Ms. Bulko, but Ms. Leggieri was always at the 12 meetings you were at? 13 A: That's my recollection but I'm -- I 14 couldn't state for certain. 15 Q: And from this point forward, in terms of 16 your involvement with the Contract Management Office and the 17 development procedures, did you have any additional 18 involvement after mid-December of 1999? 19 A: I don't think so. I think they had it up 20 and running fairly smoothly. They were getting their -- 21 their processes in place with the various departments and it 22 was working reasonably well. 23 Q: And then you went back to doing other 24 projects for the City until the time that you left? 25 A: Yes.

1 Q: All right. 2 MR. PATRICK MOORE: Commissioner, we're about 3 to move to another topic, and so this might be a good 4 time -- 5 MADAM COMMISSIONER: Okay. 6 MR. PATRICK MOORE: -- for a break. 7 THE REGISTRAR: The inquiry is in recess until 8 ten (10) to 12:00. 9 10 --- Upon recessing at 11:30 a.m. 11 12 --- Upon resuming at 11:50 a.m. 13 14 THE REGISTRAR: The inquiry will resume. 15 Please be seated. 16 17 (BRIEF PAUSE) 18 19 MR. PATRICK MOORE: Commissioner. 20 21 CONTINUED BY MR. PATRICK MOORE: 22 Q: Mr. Power, we'd like to move -- I'd like 23 to move you now to another matter, and that's the matter 24 involving the acquisition by the City in December of 1999, of 25 certain Oracle Enterprise agreement licenses.

1 A: Yes. 2 Q: And we have very few documents on this 3 that relate to you, but we do have some, and from that I take 4 it that you were somehow involved in at least part of the 5 process, is that right? 6 A: Yes. 7 Q: And from your own recollection, can you 8 tell us when and how you came to be involved in this matter? 9 A: Well the how was again, asked by Lana 10 to -- to work with her on this thing. The when, I would -- I 11 don't have a dates with me but in mid to early fall that 12 year. September-ish, October. 13 Q: The first document that I could identify 14 that relates to you, you'll find at Tab 116 of Book 1 of your 15 book of documents, and that is our document 38993, and it's 16 another one of these documents which incorporates several e- 17 mails. 18 A: I'm sorry, what's the Tab number? 19 Q: Sorry. 20 MADAM COMMISSIONER: 116. 21 MR. PATRICK MOORE: 116. 22 23 CONTINUED BY MR. PATRICK MOORE: 24 Q: And it incorporates several e-mails. The 25 -- the oldest, if I can put it that way, of which seems to be

1 the one at the bottom of the first page under the date, 2 December 13, 1999 at 4:57 p.m., which is a communication to 3 you on the subject of Oracle Agreements from L. Griffith. 4 That would be Larry Griffiths? 5 A: Yes. 6 Q: G-R-I-F-F-I-T-H-S. And he was with 7 Oracle, as I understand it, is that right? 8 A: That's correct, yes. 9 Q: All right. So, this is December at which 10 point Mr. Griffiths is sending you Oracle agreements in draft 11 form for your review and processing. 12 But I take it from what you've told us earlier 13 today, that you -- you're involvement predated this by some 14 period of time, perhaps a month or two. 15 A: Yes. 16 Q: So, can you fill in the gap for us, Mr. 17 Power, of what it was Ms. Viinamae asked you to do and what 18 you did do, before you get to the draft agreements stage? 19 A: Well, the intent was to negotiate a deal 20 with Oracle for their enterprise licensing arrangements which 21 would have significant cost -- positive cost impacts for the 22 City because they were a large user of Oracle licenses. 23 Part of the problem we had doing that was just 24 compiling a list of who had Oracle licenses and this was the 25 -- you know, during the amalgamation period and we had seven

1 (7) different organizations to deal with. So just getting an 2 inventory in place took a long time so that's essentially 3 where we started going with it and I worked with Larry 4 Griffiths from Oracle in doing that. 5 Q: And what assistance did he provide in 6 generating the numbers of users, for instance? 7 A: Well, he had some of their own 8 documentation to work from, you know, going back into their 9 records and who purchased what and at what time and then to 10 go back and see if this organization still exists or if the 11 people are still there and -- 12 Q: And I expect we'll hear from Mr. Griffiths 13 but from your understanding, from your side of the 14 discussion, was there also a component of Oracle's prediction 15 of what the City's needs for numbers of licenses would be on 16 a going forward basis? 17 A: Well, we were working towards that. We -- 18 we first of all wanted to figure out how many we had and I 19 think when we got down to a reasonable number that everybody 20 was comfortable, even though it may not have been completely 21 accurate, we were in the sixty-five hundred (6500) to seven 22 thousand (7,000) range. 23 Q: And when you say everybody was comfortable 24 with, help us to know who everybody on this -- 25 A: Okay.

1 Q: -- project would have been? 2 A: Everybody would be a small group. It 3 would have been myself, Larry Griffiths and Lana Viinamae. 4 Q: And you were reporting to Lana, were you? 5 A: Yes. 6 Q: So when -- when you got to the probable 7 number of approximately sixty-five hundred (6500) or so 8 users, what did you and Ms. Viinamae discuss as to what the 9 City should do with that information? 10 A: Well, that was the information that she 11 took going forward in negotiating with Oracle on what the -- 12 the ultimate price should be. 13 Q: And did she have that negotiation with Mr. 14 Griffiths? 15 A: Yes, she did. 16 Q: Did she have that negotiation independent 17 of your involvement? 18 A: For the most part, yes. 19 Q: And as part of the negotiation was she, as 20 far as you understood it, looking at the number of necessary 21 licenses and at the cost of each? 22 A: You mean a total value -- a total number 23 and a total value? Yes. 24 Q: And in addition, to your knowledge, was 25 she discussing needs for maintenance of Oracle software?

1 A: It was mostly maintenance. We already had 2 purchased the authority to use the license. The biggest cost 3 going forward would be for maintenance. 4 Q: And when did you come to know that Oracle 5 was suggesting a number larger than the number that the City 6 already had of enterprise licenses? 7 A: Well, we think -- if I can recall this, 8 the inventory showed that we had, let's see, seven thousand 9 (7,000) was the number, then she started looking at the other 10 projects coming down -- at the other big projects. The SAP 11 would be a big one. A couple of others that we knew about. 12 So if you start adding those as future requirements, that's I 13 think when they got up into the -- the number in around ten 14 (10), eleven thousand (11,000). 15 Q: And was the development of that future 16 needs number of ten (10) or eleven thousand (11,000) 17 licenses, was that Ms. Viinamae's calculation or was it Mr. 18 Griffith's calculation or a combined effort between the two? 19 A: It was combined between the two with 20 probably information from outside. You know, other project 21 managers or other department managers on the possible size of 22 the systems that were going to be going in. 23 Q: Now, it sounds to me, Mr. Power, that your 24 understanding of this negotiation was that it was something 25 driven by amalgamation, and something addressing the City's

1 future technology needs? 2 A: Yes, and also driven by price. 3 Q: Yes. But to what extent did you 4 understand that it was driven by year 2000 considerations? 5 A: It would be a fairly significant part of 6 our year 2000 piece of work, just to know the number of 7 licenses we had, the commitments we had, attempting to 8 standardize on Oracle as a database standard, if that was 9 going to be part of the -- of the plan. 10 So, it -- it would be a year 2000 piece of 11 work, yes. 12 Q: I'm -- I'm struggling with understanding 13 in what respect it was year 2000, as compared to the 14 necessary result of amalgamation? 15 A: Well, it -- it would be no different than 16 anything else that we did in the year 2000, as a result of 17 amalgamation. 18 I think amalgamation came a lot quicker 19 because of the year 2000 projects, and we could make 20 decisions and move forward quickly. 21 Like, you know, move out obsolete equipment 22 and put the new stuff in there and -- and get decisions made 23 that would have probably taken a longer time in another 24 environment. And Oracle and probably other software 25 licensing agreements would be a natural part of that.

1 Q: The -- maybe we should back up for just a 2 second and -- and have you tell us what you understood an 3 Oracle Enterprise license was and -- and what it accomplished 4 for the City, why the City had about seven thousand (7,000) 5 of them in the first place? 6 A: Well, the previous arrangements were a 7 series of some -- one (1) of contracts with the various -- 8 the various Cities and some Cities even had more than one (1) 9 licensing arrangement within their organization. 10 By pooling it, you get it centrally managed, 11 you get a central contract, and the price comes down from 12 like -- again I'm guessing at numbers here, but around 13 seven/eight hundred dollars ($700/$800) a unit, down to about 14 two hundred and fifty (250) or three hundred (300). So, this 15 is a very significant price advantage in managing software 16 licenses that way. 17 Q: I appreciate that the business argument 18 supporting moving to a larger number and taking advantages of 19 economies of scale, but what I'm still wondering is whether 20 the additional, if it's three thousand (3,000) more or less, 21 Enterprise licenses that were being negotiated for, whether 22 they were needed for year 2000, before the expiry of year 23 2000, or whether they were projected as being needed in the 24 foreseeable future, including year 2000 and beyond? 25 A: I -- I think it would be year 2000 and

1 beyond. 2 Q: And in fairness, it may be that you're not 3 the person that is most knowledgeable about this, can you -- 4 can you tell us about the extent to which you were involved 5 in or relied upon by Ms. Viinamae to be involved in the 6 negotiation of the needs analysis? 7 A: Not very much. My role mostly was to help 8 get the thing set up and find out where we are and how -- how 9 far we have to go to get a deal, in terms of what we already 10 owned, what we had committed to, working with the other 11 product suppliers, because there are a number of 12 organizations that can supply Oracle licenses rather than 13 directly through Oracle, so we had to work on that in terms 14 of getting them to commit to move into our licensing 15 agreement, as opposed to paying them directly. So, this and 16 that going on. 17 Q: And so, you were doing the -- the 18 negotiation with the suppliers to the City and ultimately 19 Oracle itself? 20 A: Yes. 21 Q: And you were involved in the earlier stage 22 of finding out how many licenses or organizing the group of 23 people who were trying to find out how many licenses the City 24 had? 25 A: Yes.

1 Q: And is it -- is it too simplistic a 2 conclusion for me to make, that you were not involved in the 3 intermediate step of determining whether ten thousand 4 (10,000) was the right number as opposed to eleven (11) or 5 six (6), or whatever other number might have been there on 6 the horizon? 7 A: That's correct. 8 Q: That part of the project was Ms. 9 Viinamae's negotiation? 10 A: Yes. 11 Q: All right. So, then by December, mid- 12 December of 1999, the decision had been made to have you 13 negotiate with Oracle toward acquiring ten thousand (10,000) 14 licenses and receiving a credit for the number of licenses 15 that the City already had? 16 A: Yes. 17 Q: And in that regard, did you deal directly 18 with Mr. Griffiths? 19 A: Yes and -- 20 MADAM COMMISSIONER: Griffith or Griffiths, 21 just so I know. 22 THE WITNESS: Griffiths. 23 MADAM COMMISSIONER: Griffiths, okay. 24 I'm still having a little bit of trouble 25 understanding how the Oracle licenses are directly related to

1 the Y2K problem. 2 The Y2K problem, as I understood it, just had 3 to do with having two (2) digits instead of four (4). Or -- 4 maybe I'm being way too simplistic about it. 5 But my recollection from back then, was that 6 if there was anything that you needed to do to be ready for 7 Y2K, it certainly all had to be done, before and probably 8 long before December the 31st, 1999, so that you could test 9 it, to make sure it was okay. 10 Have I got that all wrong? 11 THE WITNESS: No, that's quite correct. But 12 there are other parts of it, as well, that we had as part of 13 our mandate. 14 And I mentioned before, ensuring, you know, 15 proper contracts with the City for -- and arrangements not 16 just for things that went wrong in the year 2000, but 17 ensuring we had good operations in place going forward. 18 You know, having eight (8), or ten (10) or 19 twelve (12) or more individual software licenses with Oracle 20 around the City, at a very expensive price, in our view, was 21 something that needed to be fixed. 22 MADAM COMMISSIONER: I don't have any trouble 23 with that. I understand that from a business perspective. 24 But from a Y2K perspective, does it matter if 25 there are fifteen (15) contracts all over the place, just

1 from a pure Y2K perspective? 2 THE WITNESS: Possibly not if they are of a 3 proper level that will work in the environment that they're 4 being required to work. 5 MADAM COMMISSIONER: In this case, if I 6 recall correctly, the contract or the authority to get the 7 licenses, I think were signed on December 28th or 29th or 8 30th -- 9 THE WITNESS: 31st. 10 MR. HUGH MACKENZIE: The 31st. 11 MADAM COMMISSIONER: -- 31st -- December 31st, 12 1999, so the last possible date in 1999. So, even if all the 13 licenses were acquired on December 31st, 1999 or January the 14 1st, 2000, how would that be fixing a Y2K problem? Or is it 15 a very wide definition of Y2K problem. 16 THE WITNESS: Well, we had a fairly broad 17 definition of a Y2K problems and part of the, as I mentioned, 18 was to correct business functions that didn't support good 19 business practices, or business practices that didn't support 20 the City's requirements. 21 And this was one (1) of them. We had others 22 like this. 23 MADAM COMMISSIONER: Okay. So, it wasn't all 24 to deal with the two (2) or four (4) digits? 25 THE WITNESS: No.

1 MADAM COMMISSIONER: Okay. All right. 2 3 CONTINUED BY MR. PATRICK MOORE: 4 Q: Earlier witnesses, I think Mr. Garrett in 5 particular spoke of the Y2K problem at the City as involving 6 getting ready for the -- the tick over of the year so that it 7 would be services as usual at the City on January 1st? 8 A: Yes. 9 Q: And if what we're understanding from you 10 is correct, it seems to be that in that narrow definition of 11 Y2K preparedness, the acquisition of the Oracle licenses 12 didn't position the City any better than the City would have 13 been positioned if the acquisition didn't happen until some 14 later time. Is that too convoluted? In other words, the 15 timing didn't help in the City's Y2K preparedness at the 16 moment of turnover? 17 A: That's reasonable unless there was 18 something we had to fix with an Oracle product in some -- in 19 some area but it's -- yeah, it -- it could have been done two 20 (2) years later, perhaps. You know, whether the impetus 21 would be there and the resources there to do it. I don't 22 know. 23 Q: Did you have any specific conversations 24 with Ms. Viinamae as you approached the culmination of your 25 negotiations with Oracle about whether this would be

1 described to the City, in terms of getting authority, as a 2 Y2K project as opposed to a necessary business objective that 3 the City needed to consider? 4 A: Well, I think we probably considered the 5 point of our mandate to -- to fix things in the critical 6 areas, the eighty-four (84), eighty-six (86), whatever number 7 we had areas to fix and it also fell within the mandate of 8 being within the authority to renegotiate contracts for the 9 benefit of the City. 10 Q: So this wasn't a matter of remediating a 11 contract that didn't address Y2K, this was a broader 12 interpretation of that -- of remediating the contract which 13 may have some implications for Y2K? 14 A: It could be all of those things. It could 15 be remediating contracts and ensuring the contracts existed 16 in the appropriate areas of the City where this product was 17 being used. 18 Q: For the six thousand (6,000) or seven 19 thousand (7,000), whatever number of Oracle licenses the City 20 had, I suppose there were contract documents in place? 21 A: In some cases they were. We had to rely 22 mostly on Oracle's documentation. 23 Q: And was there a concern that whatever 24 documentation Oracle had, that it was not Y2K compliant in 25 and of itself?

1 A: It would have to be checked. 2 Q: And did you personally involve yourself in 3 the checking of Oracle documentation for that purpose? 4 A: No, we would have our technical people 5 look at them. 6 Q: Do you have any recollection now, Mr. 7 Power, that Oracle contract documents for the existing 8 enterprise licenses were checked and found wanting? 9 A: Not that I recall. 10 Q: Okay. Do you recall ever having seen any 11 documentation at the City supporting the need to move seven 12 thousand (7,000) to ten thousand (10,000) Oracle licenses? 13 A: Not written that way, no. There was 14 discussions that we bring in, in addition to the identified 15 numbers, if we move, you know, the software licenses over 16 from SAP with -- or some of the other major projects that 17 were coming up, then -- then the number we were working with 18 of six (6) or seven thousand (7,000) could go considerably 19 higher. 20 Q: And in those discussions, do you recall 21 who participated on behalf of the City? 22 A: It would have been Lana. 23 Q: Did you ever have discussions that you 24 were part of with Ms. Viinamae or Mr. Andrew on the subject 25 of Oracle licenses, numbers, needs and costs?

1 A: Just a discussion of getting to the 2 enterprise license agreement number to get the -- to get the 3 significant increased cost benefits. 4 Q: Tell me about that discussion, when did 5 that happen? 6 A: I think it was -- I don't think it was a 7 single discussion, I think it went on over a period of time 8 as to how we go about doing this. I understand that the City 9 had tried to do this with Oracle many times before, and 10 weren't successful in getting Oracle to the table to concede 11 that kind of business to them. 12 Q: And they weren't successful in the sense 13 that they weren't able to interest the City in -- in 14 accepting the Oracle recommendation and doing a business deal 15 based on it? 16 A: No, I don't think they were -- they were 17 successful in getting Oracle to see that there was enough 18 business there to get to that level of pricing. 19 Q: All right. And do you -- did you have any 20 knowledge of any involvement of others in the City Executive, 21 in the decision making process to acquire ten thousand 22 (10,000) Oracle Enterprise licenses, people such as Ms. Wanda 23 Liczyk? 24 A: Not that I'm aware, no. 25 Q: Or Mr. Garrett?

1 A: Well, Mr. Garrett signed the agreement. 2 Q: After the agreement -- after the 3 negotiations were complete? 4 A: Yes. 5 Q: Yes, that's in the way of formalizing it. 6 But do you have any knowledge of involvement on his part in 7 the negotiation stage? 8 A: Not that I'm aware, no. 9 Q: All right. Well then the negotiations 10 having gone a certain distance, by December the 13th, it 11 appears from the e-mail that I directed you to at Tab 116, 12 that Mr. Griffiths is sending you draft acquisition 13 documents? 14 A: Yes. 15 Q: Now, at that point it is my understanding 16 that you were talking about an outright purchase from Oracle 17 of Enterprise licenses and associated maintenance services 18 and so forth; is that right? 19 A: Yes, that's correct. 20 Q: And to that point, that is the 13th of 21 December of 1999, had you been aware of any discussion at the 22 City about acquisition of these Oracle Enterprise licenses 23 through a financing vehicle involving leasing? 24 A: No, I wasn't. 25 Q: So, when you received this communication

1 from Mr. -- from Mr. Griffiths, it appears from the next 2 section, that is toward the centre of the page, that on 3 December 14th, at 8:50 in the morning, you communicated with 4 Mr. Fecenko at the Fasken law firm, and you asked him this: 5 "Mark, could I please have a review of the 6 attached documents, with a very quick 7 turnaround, say twenty-four (24) hours." 8 Now, at that point was this communication 9 preceded by any other communication to Mr. Fecenko, such as a 10 letter or a voice mail or a telephone call? 11 A: There may have been, I don't recall. 12 Q: And do you recall whether Mr. Fecenko had 13 been involved with you, or Ms. Viinamae, in any of the 14 discussions to this point, with Mr. Larry Griffiths? 15 A: I don't think so. 16 Q: And so, this would be the first triggering 17 of his involvement in the process? 18 A: I think so, yes. 19 Q: And did you have a discussion with Ms. 20 Viinamae which preceded your communication to, and retainer 21 for this purpose of Mr. Fecenko? 22 MADAM COMMISSIONER: I am sorry, Mr. Moore -- 23 MR. PATRICK MOORE: Did you have a -- 24 MADAM COMMISSIONER: -- did you have a 25 discussion with --

1 MR. PATRICK MOORE: -- Ms. Viinamae -- 2 MADAM COMMISSIONER: -- Lana Viinamae, about 3 retaining him for this purpose? 4 MR. PATRICK MOORE: Yes. 5 THE WITNESS: I don't recall any conversation 6 specific, but it would -- it would be a thing I would do, 7 yes. 8 9 CONTINUED BY MR. PATRICK MOORE: 10 Q: And was it your understanding at the time 11 that you were communicating with Mr. Fecenko on the 14th of 12 December, that you were retaining him pursuant to the City's 13 Y2K retainer with the Fasken law firm? 14 A: Yes. 15 Q: And then Mr. Fecenko responds, it appears, 16 at 9:07 you'll see that at the top of this page, with an e- 17 mail to you, telling you that he has had a lot of dealings 18 with Oracle during the last year and that he hasn't yet 19 looked at the documents. 20 And then he asks you certain questions which 21 are business related questions having to do with how many 22 licenses are you getting and what's the total value of the 23 deal and those sorts of things. 24 Stopping there for a moment, do you remember 25 receiving that inquiry from him? That response and inquiry?

1 A: Yes. 2 Q: And at that point, you hadn't sent him any 3 background documents on this Oracle transaction other than 4 the two (2) Oracles agreements referred to in Mr. Griffiths 5 e-mail? 6 A: It appears that way, yes. 7 Q: Right. And doesn't appear that you've had 8 any in-depth conversation with him, for the purpose of -- of 9 describing for him the process which led you and the City to 10 this point of negotiations with Oracle? 11 A: Correct. 12 Q: So, when you got this communication from 13 Mr. Fecenko, what did you do about it? 14 A: Well, I believe I answered his questions 15 as best I could. 16 Q: Well, in -- in connection with answering 17 his questions we haven't found any -- any documentation which 18 demonstrates that you sent him a response e-mail providing 19 him with background documents or information. 20 So are we missing that or was it a telephone 21 conversation and an oral communication to him? 22 A: I just don't recall. It would seem 23 reasonable to me that I would do what he asked me to do. 24 Q: The next document that we can find appears 25 to be the document at Tab 11 of your first book of documents

1 and that's a 16 December 1999 memorandum from Mr. Fecenko, 2 our document 5457, and this document, you'll see, is in a 3 memorandum form, addressed to you with a copy to Mr. Loreto. 4 Stopping there for a moment, had you had any 5 discussions until the 16th of December with Mr. Loreto in 6 which you involved him in the process and made him aware of 7 the ongoing negotiations? 8 A: I don't know, probably not. 9 Q: All right. And as a result of a copy of 10 this apparently going to Mr. Loreto, did he contact you to 11 talk to you on or about the 16th of December about the 12 transaction? 13 MADAM COMMISSIONER: Mr. Loreto, you mean? 14 MR. PATRICK MOORE: Yes. 15 THE WITNESS: I don't recall that. 16 17 CONTINUED BY MR. PATRICK MOORE: 18 Q: All right. Well we'll come back to Mr. 19 Loreto in a moment then because there is a document of 20 communication between you. 21 So, let's just talk for the time being about 22 this memorandum. In this memorandum, Mr. Fecenko sets out at 23 some detail his thoughts and comments on some twenty-four 24 (24) separate components of the draft documents. 25 And he starts out by saying that the drafts

1 that you provided to him are in standard form, as he puts it: 2 "Being standard form agreements, are 3 notably one (1) sided. Oracle has been 4 known to be quite inflexible as to their 5 standard form, but will show some limited 6 degree of flexibility if the fees justify 7 it. More specific comments can be provided 8 if the quantum of sales and the discount 9 off the Oracle standard list price for 10 licenses and maintenance fees were known, 11 we attach as appropriate certain inserts 12 for consideration." 13 So, when you received this memorandum, it 14 appears to be the kind of memorandum that might assist you in 15 ongoing negotiation towards revising or amending the draft 16 documents. Is that the way you read it? 17 A: Yeah, yes. 18 Q: In other words, it might be very helpful 19 to you to identify specific items in the draft Oracle 20 agreements and then talk to Mr. Griffiths or perhaps others 21 on behalf of Oracle about making amendments to better suit 22 the City's needs? 23 A: Yes. 24 Q: Is that right? 25 A: Yes.

1 Q: And so did you use it for that purpose? 2 A: Yes, I did. Yeah. 3 Q: And did you go back to Mr. Griffiths and 4 point him to each of the enumerated points and have 5 meaningful discussions with him? 6 A: Yes. 7 Q: And as a result of those discussions, were 8 the changes that Mr. Fecenko recommended incorporated into 9 the final form of the agreement? 10 A: I don't recall if they all were. It went 11 -- his changes went back to the Oracle contract management 12 and legal people. 13 Q: And as a result of your negotiations with 14 Oracle, did you then re-involve Mr. Fecenko to say, for 15 instance, they have agreed with this but not with that and 16 what do we do next or was he just retained for the purpose of 17 -- 18 A: No, I -- I think we went back and forth 19 with him on this. 20 Q: All right. I didn't see documents 21 confirming that. So do you have a recollection of whether 22 there were documents or whether it was by way of oral 23 discussions? 24 A: Well, we had a number of phone calls but I 25 thought there were other documents as well, though.

1 Q: And did you eventually show Mr. Fecenko 2 the final form of the draft Oracle agreements before they 3 were executed for the City? 4 A: I may not have, no. 5 Q: Chronologically, moving forward the next 6 document we found that may be of assistance is at Tab 10 and 7 that's a communication from Mr. Loreto to Mr. Fecenko and to 8 you under the date of December 23, 1999, our Document 5412. 9 A: Yes. 10 Q: And in this communication, Mr. Loreto asks 11 this question: 12 "Is this an enterprise agreement? Brendan, 13 if this is an enterprise agreement and it 14 is not part of the Council approved Y2K 15 budget then is there a separate Co