This will continue my reporting on the ongoing situation regarding the massive over-spending on technology that I discovered after taking office last December, and the subsequent dispute and litigation with BridgeTech Systems Ltd.
As I indicated in previous reports, the National Executive Board decided to “write off” approximately $6.5-million of capitalized costs for work done by BridgeTech in implementing the so-called “integrated Oracle financials package” and a number of other National Office systems between 1998 and 2001. In addition, we refused to pay the invoices which were submitted after I took office, which in turn led BTS to launch a claim against us in the Ontario Superior Court of Justice for $1.5 million. In response, CUPE initiated a counterclaim against BTS for damages. The first stage of the court proceedings involved the court-appointed mediation process that is required in the Ottawa judicial district.
With legal counsel, I met BTS in mediation on June 17th. Under the terms of court-appointed mediation, all discussions held are deemed strictly confidential, and violations of that confidentiality can be subject to contempt of court penalties. Therefore, all I am able to say regarding the outcome of the June 17th mediation was that no agreement was reached. Further procedural discussions between legal counsel took place both before and after the various vacations of the lawyers and the principals, but as I write there have been no further attempts at settlement.
Further settlement discussions are unlikely because of the discovery this summer of evidence clearly linking BridgeTech to schemes of false invoicing with respect to a campaign contribution to the Sid Ryan Campaign and to financing the attendance by CUPE participants at several Oracle Users’ Conferences in the United States. These matters have been referred to the Ottawa Police. Our position has been, and will continue to be, that CUPE will pay absolutely no more money to BridgeTech.
The lawsuit also involves, in addition to the Bridgetech claim and counterclaim, a claim by Ottawa-Carleton Leasing (OCL) against us for failure to make lease payments on computer equipment leased by OCL to CUPE. OCL is a company owned and controlled by the principal of BTS, but is a separate company and has made a separate legal claim. While we have used, and in fact continue to use, computer hardware leased from OCL, we have also terminated payments to them due both to the legal matters outlined above and to the fact that we have a substantial dispute with them over the terms of the existing leases. These leases do not in many cases set out essential elements of lease agree-ments, including detailed descriptions of the equipment being leased, the capital cost of each item, and the effective lease rate. Therefore, our staff continues to have great difficulty in establishing whether or not we are receiving real value for these lease agreements, some of which will continue to run through to October 2004.
While we would very much like to be able to conclude these legal matters and close the books on this sordid chapter in CUPE’s history, it appears that the legal claims and counterclaims with BTS and OCL will persist for some time.