Once the train was on the track, millions of dollars began flowing into Champagne’s account at the Bank of Nova Scotia. “At that point I convinced myself that I was well worth the money,” he says. “I was saving DND $157 million a year, so I said, ‘Okay, I’m probably taking $10 million a year, that’s GST.’ I convinced myself I knew what was best for everybody. They would call it a God complex, I guess.” Pretty soon, the thirtysomething family man was living, if not quite like a god, then certainly like royalty.
A key problem for any thief is how to handle their loot in a way that will avoid detection. Here again, Champagne proved he wasn’t your typical embezzler. He decided the best way to hide his windfall was not to hide it at all. Over his years at DND, Champagne drove nice cars (he liked Corvettes). He took trips to Vegas and elsewhere on private jets. He moved into a palatial mansion in a gated community outside Ottawa. Built on two acres, with tennis courts, a pool and a private gym, the property was once appraised at over $1.4 million. He began making multi-million-dollar investments in Ottawa technology firms. He bought a vacation home in Florida, backing onto a golf course. In the late 1990s, he took the family on a trip to the Turks and Caicos islands, and fell in love with the place. Champagne claims he spent over $10 million flying tradesmen to Providenciales Island to build his seven-bedroom beachfront mansion. In 2001, he moved his family to the island, enrolled his kids in school, and spent most of the next three years commuting back and forth to his job in Ottawa, spending weekends in the Caribbean.
If anyone asked, he told them he’d made successful investments in the stock market, speculating on high-tech companies. It was the same story for everyone, including his wife and extended family. But few people asked questions.
“Somewhere along the line—and it wasn’t like an epiphany of a moment—I said, ‘I’m not going to pretend I’m hiding in some Bridlewood home and I don’t have any money,’ ” he says. “I didn’t hide my wealth from anyone. I didn’t rub it in anyone’s face at work, but most of them knew that I was well off.” Champagne was hiding all the evidence of his crime in plain view, and he figures that may have actually reduced suspicion.
“Because I was so blatant with it, you get less questions. Even with my wife, [she thought] I made great high-tech investments and I’m an extremely well-paid consultant in National Defence. That part is not that difficult to sell.”
The pressure of the job and the scheme, combined with his ever-inflating lifestyle, took a toll. Aside from the demands of running much of DND’s huge IT operation, there were far-flung investments and properties to maintain. And, of course, every March there was a whole lot of money to funnel into his bank account from desperate bureaucrats. Still, Champagne says he never really worried about getting caught. “I actually thought I was smarter than everybody anyway,” he says. “Nowhere did I say to myself, ‘Okay, I have $25 million, I should call it a day’—because, for one thing, I couldn’t think of an exit strategy from National Defence.”
There were moments, however, when certain people in the department would ask too many questions. They raised concerns about the annual rush of year-end spending, or they insisted on seeing a lot of Champagne’s paperwork. Those people made him uncomfortable, so he took matters into his own hands, using his connections in Ottawa’s high-tech industry. “These were people who didn’t understand the bigger picture, they were too bureaucratic, they were going to cause problems for the year-ends, etc. etc. They just didn’t . . . they didn’t get it,” he says. “So I had a couple of people moved, headhunted out of the Department of National Defence.”
That kind of meddling might provoke an attack of conscience in some, but Champagne never saw himself as a bad guy. “There were certainly nights where, looking in the mirror, you think ‘Jeez . . . what have you got yourself into?’ But to be honest, while you’re in the middle of all this, you feel like you’re saving the world. There’s no time to be saying, ‘Is this necessarily the right or wrong thing to do?’ I knew if I dropped the ball, I could face criminal charges. But in your mind you’re really thinking, ‘That’s not going to happen, because this could be a massive government scandal. Who would want that?’ ” So, the money train kept rolling merrily along. Until the day it came off the rails.
Paul Champagne knew how to beat an audit; he’d dealt with many of them over his time in government. But he could not deal with three at once.
“Around Christmas 2003, I got hit by a perfect storm,” he recalls. “Consulting Audit Canada was in the midst of a regular audit. Our own audit organization within National Defence was also auditing the maintenance contracts. Then Hewlett-Packard started doing an audit of their own maintenance contracts. They brought in KPMG, and I knew I could not control that one. I remember sitting in my den trying to control the flow of these three separate audits, saying, ‘I gotta figure an exit strategy pretty quickly here. This is not going to go well.’ I was called in eventually by my management within National Defence. At that point I knew it was over.”
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Champagne or his alter ego tries to make us believe that he saved DND a billion dollars or so.
No way Champ – facts prove otherwise – the accounting shows that your department's budget increased every year and it was completely spent every year – and on top of that you stole an extra 140 million.
There were no savings.
You have Antisocial personality disorder
Three or more of the following are required:
Failure to conform to social norms with respect to lawful behaviors as indicated by repeatedly performing acts that are grounds for arrest;
Deceitfulness, as indicated by repeatedly lying, use of aliases, or conning others for personal profit or pleasure;
Impulsivity or failure to plan ahead;
Irritability and aggressiveness, as indicated by repeated physical fights or assaults;
Reckless disregard for safety of self or others;
Consistent irresponsibility, as indicated by repeated failure to sustain consistent work behavior or honor financial obligations;
Lack of remorse, as indicated by being indifferent to or rationalizing having hurt, mistreated, or stolen from another.
I don't like what the guy did but you are now distorting facts with your comments. It is a fact backed up by documentation that was backed by the Crown and DND that Champagne did reduce the budget dramatically during his tenure. The fact that DND's overall budget increased has nothing to do with the IM group Champagne worked for.
When you spout facts know of what you speak.
I'm sure you understand (or perhaps not) that the theft 140 million dollars is wrong. The facts are that nothing was saved by the department and trying to rationalize the theft is the product of a sick mind.
I am not disputing that theft is wrong. I am also not trying to rationalize his actions. I am stating that overall IM budgets were drastically reduced during his tenure. DND as a Department saved a ton of money and I assume that is why this was allowed to go on so long. Obviously the Department turned a blind eye and stated "the end justified the means". It is ridiculous that "year-end" spending was handled in this fashion.
Budget money was merely diverted. Champagne took advantage of the ridiculous year end spending frenzy to divert vast amounts of money to other areas while allowing himself and his other criminal friends to take a percentage off the top.
There was no money saved. There was no money saved. There was no money saved.
The question I have always had is where was the supervision? I work in a similar field, and the idea that someone at his level could authorize such large expenditures is staggering. Frankly, I think I already know the answer:
1) Most Military officials do not understand PS rules and procedures, and are often contemptuous of the need to do so. Such things are lumped under the term "bureaucracy", and are usually delegated to whatever level can't delegate them further.
2) DND values results above all else, and Paul Champagne got results. He made problems go away, and he did so without any messy paperwork. He was a Military manager's dream.
Bureacracy can be a pain, fair enough, but it's also bureaucracy that ensures rules are followed and taxpayers' money is safe-guarded. If even the most basic rules had been followed, Paul Champagne could not have gotten away with this.
I note that Gen Paul Hellier has some pointed comments towards "bureaucrats" in his new book, so this attitude is still pervasive. DND still has a lot of work to do if they want to ensure this doesn't happen again.
Champagne got results and that was the only thing that mattered. His actions saved DND $$$$$$ regardless of how it was accomplished. We may not agree but in this case
"The end justified the means".
And please, don't tell me his Superiors didn't know what was happening!
I am very interested in all that is getting dragged into this debate. I admittedly have some strong feelings here.
There is not much to defend here about this guy – He is a criminal. He stole money. He admit it. There is nothing noble about crime – regardless of how much money you save people along the way. Interestingly enough, i'll bet a few of these angry posters don't hate robin hood they way they hate this fellow.
What I really don't understand is the fixation with punishment in our society. Sorry folks, but it is VERY old news that punishment has very little effect on behaviour. If you spank your kid they will probably not act out until you leave the room.
'positive reinforcement' is what changes behaviour. Pull people over and give them scratch and win tickets if you see them wearing seatbelts, and suddenly the whole town is wearing seatbelts all the time – 20 years later, 19 after the scratch and win tickets are no longer being given out and people are still religiously wearing seatbelts….
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I think there is really somthing sadly archaic and perhaps even beastly about human nature that seems to have us 'enjoy' watching others suffer. we know that this person did something very wrong, and for that we want them to endure suffering. Nothing good comes of it. They will not learn any lesson, as we know (basic entrly level psychology classes teach that. In addition basic entry level criminology level classes teach that stricter consequences do not influence behaviour. For example, the year after Canada stopped giving the death penalty, murder rates dropped… People were terrified suddenly everyone and their grandmother would go on killing sprees because of the absence of mega punishments – but that clearly didn't happen. Why? because when someone commits crimes they are not thinking about the negative consequences) it does not influence behaviour.
Thefore, the only real benefit to punishing people is the pleasure others experience in watching the individual being punished suffer.
Keep in mind, A) Strict consequences do not influence behaviour {Ask any criminologist). B) Punishment is a very ineffective method of changing behaviour (ask any psychologist).
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So why is it people are crying the blues about our justice system?
Now, i am not in a million years going to stand up for this guy. He agreed to his salary when he took the job. If he was to be making a commission on $ saved, that should have been discussed when he is hired. As far as i am concerned, saving the government that much money was him doing his job.
The big issue to me, that i see very little discussion on, is the budget spending. I was very taken back by the comment that underspending is about as horrible as over spending because it means budget cuts. This notion causes a horrifying amount of wasteful spending, and indeed, led to this absurd scam. That issue needs some serious attention.
Just my thoughts.
The entire "problem" started and was "allowed" to continue in order to make budget. Spend it or lose it still persists.
Strange response…… are you referring to me? I thought you were a government employee critical of the theft? My posting was for Champagne or Viking or maninthemirror or whatever he's calling himself. I think maybe we have ferreted out the truth here. How many different names are you using here Champagne? As for meeting up….when and where?
I apologize. I mixed your e-mail up with maninthemirror. I am definitely a government employee critical of the theft. And I have a lot of friends over at DND who are appalled by what Champagne did and how long it took to catch him.
You don't seem to understand. When he came in DND was spending $200m on IT contracts. He reduced that to $50m. Thus saving $150m. per year! Therefore there was an area where other groups could have "their" year end money spent!
So, in other words, the money wasn't saved. You freed it up to be spent elsewhere. Whereas if you didn't perform this magic, it would have gone unspent. Using your own logic, but reverse-engineering it, I think you owe the Canadian taxpayer a 10% fee for finding a way to spend more, don't you?
Flawed logic but very insightful. I don't want to defend his or DND's actions. It is ridiculous this went on this long and even more ridiculous money is spent at year-end this way.
They deserved each other.