An executive at Canada’s pipeline regulator apologized to staff for hiring a private security firm to investigate them only after the investigation proved unsuccessful and was about to be exposed to the public, reveals newly released correspondence. Sylvain Bédard, executive vice-president of “transparency and strategic engagement” at the National Energy Board (NEB), apologized to employees in an internal message sent to all staff on May 30, 2017, and released this month through access to information legislation. Bédard's message was sent about a month after National Observer reported that the NEB had awarded a $24,150 contract to an Ottawa-based firm, Presidia Security Consulting, to find out which staff members were speaking to reporters. His message to staff also came right before the NEB released a censored copy of Presidia's final report to National Observer through access to information legislation.

At that time, several former federal whistleblowers described the NEB’s investigation as a “witch hunt” launched to intimidate staff. The inconclusive Presidia report said no leaker was discovered during its investigation which included interviews as well as searches of NEB staff email, BlackBerry accounts and internal messaging. The report also offered false speculation that National Observer exaggerated about having more than one source at the regulator and that it had eavesdropped on a meeting. The investigation is among a series of controversies that have plagued the regulator in recent years, leading to new federal legislation introduced by the Trudeau government this month. If adopted, Bill C-69 would abolish the NEB, terminate the positions of its 19 politically-appointed Board members, and create a brand new regulator tasked with restoring public trust in federal oversight of the energy industry. The new regulator would take over the NEB's current role in overseeing major oil and gas pipelines as well as some electric power transmission lines and offshore oil development projects.

'They say hindsight is 20-20' NEB executives approved the investigation of staff to identify which sources had told National Observer about incidents and mistakes at the regulator, including a case in which another vice-president at the regulator had ordered the deletion of an embarrassing email sent to the NEB’s head of security. The investigation also aimed to find the sources of a separate news report by National Observer that revealed the NEB’s top bureaucrat, then-chief operating officer Josée Touchette, had joked about tasering environmentalists in an all-staff meeting attended by more than 100 employees. The staff meeting was held on Aug. 30, 2016 in response to a protest in Montreal that forced the NEB to cancel a panel session reviewing TransCanada Corp.’s Energy East pipeline, a project that has since been terminated. A few months later, in March 2017, Presidia submitted a seven-page report to the NEB that was filled with speculation, contained some details of its investigation and other information that was publicly available at the time. "There appears to be only two ways in which Mike De Souza could have become aware," a private investigator speculated in a report submitted to the NEB after attempting to identify @mikedesouza and @NatObserver 's sources. #cdnpoli #cdnfoi By the end of May 2017, Bédard told staff in his message that the NEB was about to release a copy of the security firm's report in response to a request made by this reporter through federal access to information legislation. He explained that he wanted to "use this opportunity" to share the same report with all of them. “Some of you might be wondering why we are sharing this report now. They say hindsight is 20-20 and looking back now, I wish I had shared the report earlier,” Bédard wrote in his message to NEB staff, also released to National Observer through access to information legislation. “Further I am sorry about the adverse effects this investigation may have had on NEB staff who were not involved with this matter and who come to work each day in service of Canadians and exemplify integrity and professionalism in their conduct.” The NEB didn't immediately respond to a request for comment about the apology. Bédard has since taken an extended leave of absence from his job while Touchette accepted an executive job with the Organisation for Cooperation and Economic Development (OECD) in Paris. The regulator’s head of security, Lee Williams, has also taken a leave of absence. At least five senior lawyers have also resigned or retired from the NEB over the past year. National Observer was not able to determine whether these departures and absences are related to the ongoing controversies. Former NEB chief operating officer Josée Touchette speaks at an event in Montreal on June 13, 2017. File photo by Catherine Legault

Security firm reviewed National Observer articles Presidia’s report said it reviewed National Observer’s news articles as part of its investigation. The report also revealed that the investigation had included a search of the NEB email and BlackBerry accounts of staff, as well as interviews with potential witnesses. This included a search of any potential communications by phone or email with National Observer, as well as a search of internal messages sent by staff related to the topics covered in National Observer’s reporting.

“The action would appear to be that of a disgruntled individual whose primary aim is to embarrass NEB and particularly the NEB Security Team and the NEB Executive Team (specifically, Ms. Touchette),” said the report in its conclusion. “Due to the lack of relevant information uncovered through the search of NEB email and BlackBerry Accounts and the lack of any direct relevant information uncovered during interviews with key NEB staff this investigation is unable to conclusively identify the individual(s) responsible for the leak of information to the media. As such this investigation is deemed to be inconclusive.” Instead, the firm used its $24,150 contract to provide the NEB with dramatic speculation about how National Observer was getting its information. "There appears to be only two ways in which Mike De Souza could have become aware of the comment regarding the 'use of Tasers' that was made by the NEB COO at the all staff meeting held on 30 August 2016: either someone at that meeting communicated that information to him, or he had accessed the meeting via the telephone dial in process himself," said Presidia's report. "Although there is one 'unknown telephone number' listed on the dial in log, it is believed that the most likely scenario is that someone at the meeting provided the information to Mike De Souza following the All Staff meeting." National Observer had spoken to multiple sources from the NEB, prior to publishing its reports. But the security firm nevertheless speculated that National Observer's might be conspiring to mislead the public about getting its information from multiple sources. "What is unknown at this time is whether or not Mr. De Souza has more than one 'source' within NEB, or if his use of the plural is specifically designed to mislead." Presidia Security Consulting was hired by the NEB in 2016 to investigate who was leaking information to the media, but it's final report failed to identify any potential sources. The firm's Ottawa office is featured here on March 14, 2017. File photo by Alex Tétreault NEB left notes, transcripts and recordings with private eye Separate internal email correspondence, also released through access to information legislation, revealed that the NEB left the evidence from the investigation, including “notes, transcripts and recordings,” in the hands of the security firm. This would prevent a member of the public from getting access to these records through the federal Access to Information Act. This legislation requires the government to provide access to federal records, upon request from any Canadian citizen who pays a $5 fee, within 30 days, unless it has a valid reason to refuse access. The emails and meeting minutes indicate that high-ranking NEB executives launched the probe of staff following a meeting on Nov. 2, 2016 involving the regulator’s chair and CEO, Peter Watson, Bédard, Paula Futoransky, a vice-president, along with an NEB lawyer and a vice-president of Presidia, Bud Garrick, who would later submit the investigation report. Futoransky is also among the executives who took a leave of absence from the NEB in 2017. At the time, the meeting participants noted “the high likelihood that the individual(s) responsible for the leaks will advise the media of the investigation.” Meantime, Bédard concluded in his message to staff from May 2017 that the NEB was going through tough times. “The expectations on us are very high, our workload is heavy, and we are working in a context of change and uncertainty,” he wrote. “Moving forward, I hope that anyone who is feeling disengaged or is struggling with their role at the NEB will take positive steps to rectify the issue. We have programs in place to help and I encourage you to take advantage of them. If these tools are not for you, please come and talk to me. I really do want each of you to feel encouraged and enabled to do your best work and to contribute to the important work we are doing at the NEB.” Despite the apparent remorse expressed in his message to staff, Bédard’s comments were contradicted about two weeks later by his boss. Stopped by National Observer at an event in Montreal, Touchette said she thought it was a “good idea" to launch the investigation, while noting that it was Bédard’s decision. The NEB has declined to say what prompted Bédard’s leave of absence, which began on Nov. 6, 2017.