Officials shocked by flow of money in U of R carbon dioxide project

After concerns were raised about an apparent conflict of interest one at of Saskatchewan's most prominent scientific ventures, some started asking: were hundreds of thousands of tax dollars wasted?  

Carmen Dybwad, CEO of the Regina-based International Performance Assessment Centre for the Geologic Storage of Carbon Dioxide (IPAC-CO2), says she was stunned when she first arrived and found out hundreds of thousands of dollars were pouring out of IPAC's bank account and going to a single private vendor.  

"Just sorting all of this out was a version of hell," Dybwad told CBC News.  

The vendor was Climate Ventures Inc., and when Dybwad took over as IPAC CEO in 2010, more than 60 per cent of her budget was going to the two-year-old company, which was supposed to provide IT services.  

'"We couldn't understand what it was and why we would need all of this stuff.' —Current IPAC CEO Carmen Dybwad on the computer system

Dybwad says the resulting computer system was as incomprehensible as the monthly bill  

"We couldn't understand what it was and why we would need all of this stuff," she said. "I think at the end of the day it was what they wanted and we were just supposed to shut up and write the cheques."  

The creation of IPAC-CO2 was announced in November, 2008, as a non-profit company to help set up rules for the underground storage of CO2.  

IPAC, located at the University of Regina, was launched with $5 million from oil giant Royal Dutch Shell and another $5 million from the Saskatchewan government.  

When it came time to spend some of that money, IPAC bought computer services from Climate Ventures Inc., although the agreement to provide IT services was untendered — essentially, a handshake deal.  

CBC News has learned that two administrators at the University of Regina — Malcolm Wilson and Ian Bailey — were for a while running IPAC and at the same time sitting on the board of Climate Ventures.  

It's a situation the government has characterized as a conflict of interest.  

Wilson, through his lawyer, denied there was a conflict and says he never received any compensation from CVI.  Bailey is on long-term disability from his job at the U of R and wasn't available for a comment.  

With Dybwad in charge at IPAC, CVI's activities came under greater scrutiny.  

One example of a transaction that raised eyebrows was when CVI billed IPAC $7,500 a month to house its computer system in a basement. IPAC later learned that the true cost was less than $2,000 a month and that CVI was marking up the bill by thousands of dollars.

IPAC was billed $2.1 million for software and IT services, but in a note to the board, IPAC management said "the greatest part of the $2.1 million dollars was spent for no acceptable business reason."

There was also almost $1 million worth of hardware of questionable use, according to Dybwad.  

"There were boxes of hardware that weren't connected," she said. "There were things that were connected incorrectly. There were bits of hardware that I don't think they knew why we had them."  

Despite the fact that IPAC paid for that hardware, there was a dispute about who owned it.  

"CVI continued to maintain that they owned them," she said. "And basically we continued to pay them as we tried to negotiate getting our assets back. I know that sounds a little loopy, but that's what we did."

All of this seems to contradict what Donna Harpauer, the government minister responsible, told the NDP Opposition last June.

"The contract cost was within the acceptable range for similar goods and services and the goods and services were necessary," Harpauer said at the time. 

Now, Harpauer says she made that claim based on what she had been told by government members on the IPAC board.

Asked recently if it sounded like taxpayers got value for their money, she said no.

Eventually IPAC was to able sever its relationship with CVI and keep its computers.

IPAC's monthly IT bill has dropped from $120,000 a month to $10,000.