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Canadian Sponsorship Scandal: The Donors
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On Tuesday, February 10, 2004, Sheila
Fraser, the Auditor General of Canada, released her damning report on the
federal Sponsorship program. Ms. Fraser,
during the press conference at the Old Train Station in Ottawa, called the
program “…a blatant misuse of public funds…” (Canadian Press 10 Feb. 2004). No
wonder, Ms. Fraser’s report noted that the two hundred fifty million dollars
spent for this ‘program’ had very little paperwork to show where the money went
and delivered very little in terms of results. Even worse, of the money spent,
Fraser wrote that about one hundred million dollars went to commission fees for
advertising firms. Many of these
advertising firms just happen to be major donors to the Liberal Party, the
party currently forming the government.
The Sponsorship program was designed to
show the ‘Canada’ word mark at festivals, sporting events and other large
gatherings of people. This program was
being implemented by the Public Works Ministry following the near defeat of the
federalist forces in the 1995 Referendum.
However, by 2002 the program started to look a little fishy. The Auditor General, Sheila Fraser, noted in
her 2002 Auditor’s report Sponsorship program, that the bureaucrats “broke just
about every rule in the book.” Following her 2002 report, which only took a
light look at the program, the Auditor General undertook a more thorough
investigation which resulted in the report released in February 2004.
So how could the federal sponsorship program start looking so fishy? As Toronto Star columnist Chantel Hebert
wrote, Prime Minister Paul Martin admitted “…that only political will at the
highest levels of the government could have allowed the sponsorship program to
function in defiance of every accounting rule, not to mention a number of
laws.” (Hebert A1 & A7). In other
words, within the political ranks of the government, someone or a group of
politicos thought it would be a good idea -- even though it was broke the law,
several financial practices and government policies -- to start funneling some
of our hard earned taxpayers dollars to these communication companies
associated with the Liberal party. Paul Martin’s admission of a certain
‘political will’ is only backed by evidence found in Fraser’s latest report.
An example of the funny financial
dealings was what Ms. Fraser, “more than $100 million was paid to various
communications agencies in the form of fees and commissions, Fraser found. In
most cases the agencies did little more than hand over the cheques.” (“Auditor
General’s Report 2004” CBC News). An
example of one of the sponsorship contracts was the creation of a television
series about former Montreal Canadians hockey great Maurice Richard which was
to be produced by the private firm L’information essentielle. According to CBC News, this is how it
happened:
…communication
firms, including Lafleur, Media/I.D.A. Vision, Gosselin and Groupaction,
received $440,000 in commissions without signing any contracts or doing any
work. The program also used Via Rail as a conduit to transfer nearly $1 million
to the television series through a "fictitious contract," reimbursing
the Crown corporation for all but $160,000 of the money. Lafleur received
$112,500 to handle the transfer. In addition, Canada Post paid $1.6 million to
sponsor the series without any deal being signed or any documentation
whatsoever, breaking the corporation's own rules. (Auditor
General’s Report 2004, CBC News).
Basically, the communications firms like
Lafleur and Groupaction were used to forward cheques to the Crown
Corporations. How come bureaucrats
within the Public Work’s Ministry wouldn’t merely send the Crown Corporation’s
a cheque instead of funneling the money through a Liberal friendly
communications company? This can only be
determined by noting what Paul Martin admitted to, that some ‘political will’
was telling the bureaucrats how to dole out the money.
The question now is how to go about
digging even deeper in order to lay criminal fraud charges, fire those
responsible for scandal and try and recoup the money lost via the program. The
Canadian Prime Minister, Paul Martin, right after the report’s release,
responded in full attack mode like any seasoned political leader would. Prime Minister Martin quickly fired Alfonso
Gagliano from his post as the Ambassador to Denmark within minutes of Sheila
Fraser’s report. Gagliano was the Public
Works Minister during the time of the Sponsorship program. Furthermore, the Prime Minister called in the
RCMP, called a Royal Commission on the Sponsorship Scandal and invited the
Public Accounts Committee to look into various aspects of the Sponsorship
Program. Paul Martin seems to attempt to
try and solve the issue by first figuring out who did what. However, Martin didn’t really read Ms.
Fraser’s report to closely because Martin made more than one false move.
The RCMP has now found
itself in a conflict of interest. The
three communication companies, Lafleur, Media/I.D.A. Vision and Gosselin,
received a cheque from the Sponsorship program of three million dollars. In
turn, the communication companies forwarded to the RCMP a cheque for $1.3
million for the government of Canada to sponsor the police force’s 125th
anniversary. In return the police force
would display the ‘Canada’ word mark.
Although, the Auditor General, Sheila Fraser, found that the RCMP should
have never received the money since the RCMP is required by law to display the
‘Canada’ word mark anyway without compensation.
So why sponsor the RCMP’s celebrations in the first place if the police
force is already required to display the wordmark? Perhaps this was just the ‘political will’
trying to find an excuse to funnel money to the Liberal friendly ad firms. So it seems to me that RCMP will find
themselves investigating themselves and, probably, finding nothing wrong with
transactions. What Martin should have
done was call in the Quebec Provincial Police force to investigate the
Sponsorship in order to avoid the RCMP from appearing in a conflict of
interest.
Martin has appointed
Judge John Gommery to head the public inquiry into the scandal. But wait!
Judge Gommery is currently the head of the Canadian Copyright Board, yet
another Liberal party appointee. To make
matters even worse, according to CTV News, the government had appointed
Deloitte & Touche to perform an audit of the Liberal Party of Canada’s
Quebec wing. However, it turns out that
the Deloitte & Touche was a major campaign donator to the Liberal Party
last year and audits the Liberal Party’s books on a regular basis. So as a way
to get to the bottom of the scandal, Martin appoints a Liberal Party supporter
to look into it? Seems to me the
Deloitte & Touche will say there is nothing wrong as they are Liberal Party
supporters. The same with Judge Gommery,
he will find that there was not any political involvement at all and that the
whole scandal was, as Martin put it, “rogue bureaucrats.” It seems even when the Martin and Liberals
want to get to the bottom of the sponsorship scandal, they only make the
situation even worse.
What’s worse, is Prime
Minister Paul Martin has claimed he new absolutely nothing about the
scandal. Martin’s claim is very hard to
believe considering that during the sponsorship scandal Martin was a senior
Quebec Cabinet Minister, Finance Minister and Vice-Chair of the Treasury Board
of the federal government. However, Mr.
Martin tried to paint a picture that since relations with then Prime Minister
Jean Chretien were so frosty, that Martin was not informed. Martin has since amended the claim of a
falling out with the former Prime Minister because a report in the National Post of a leaked letter that
was sent to Martin about wrongdoings in the Sponsorship Scandal, to say he
heard rumours. These rumours, had Martin
bothered to dig deeper as Minister of Finance or Vice-Chair of Treasury Board,
would have further evidence on the budget.
As Minster of Finance, why did Paul Martin not demand the Finance
Ministry investigate these rumours before approving further money for the
Public Works Ministry and its Sponsorship program? It seems Paul Martin has some explaining to
do. He may be able to dodge and weave
the questions from the Opposition parties in Question Period in the House of
Commons. However, if Paul Martin is
hauled before the Royal Commission and asked what he knew, then Martin will
have to come clean. If he does not come
clean on the issue and continues to deny any knowledge, he will be politically
lambasted for failing to have his bureaucrats to investigate.
Sheila Fraser spent
one million dollars and a lot long hours on a report that horrified Canadians
from coast to coast to coast. However,
sadly to note, this is not the first scandal the federal Liberal party has
suffered since taking office in 1993.
Since 1993 the HRDC Billion Dollar Boondoggle and the Shawinigate
Scandals have erupted. The Liberals keep
holding onto power because the Liberals merely just waited for the scandals to
blow over. In terms of “Shawinigate”,
the government was able to withstand the barrage of questions from the
Opposition by having cabinet minister like then Industry Minister Brian Tobin
and then Government House Leader Don Boudria run intereference which meant then
Prime Minister Jean Chretien did not have the answer the questions. In terms of the HRDC Billion Dollar
Boondoggle, the government and the Human Resources Minister, Jane Stewart, only
promised to hold a full investigation.
However, eventually both of these scandals blew over and Canadians
quickly forgot about them before going to the polls in the next election. This time, however, the Sponsorhip Scandal
comes just before a possible spring election.
Now it is the voter’s
chance to show Paul Martin and the Liberal Party that such fraud and money
laundering with our hard earned taxpayers dollars will not be tolerated. According to the latest polls taken by CTV
News, the Globe & Mail and Ipsos Reid, the Liberals popularity have dropped
at almost ten percent. This poll was
taken before the public inquiry and police investigations have even started
into the Sponsorship Scandal. Thus, the
polling numbers can only get worse as the Liberals head towards the next
election as the public inquiry, parliamentary committees and the police
investigation get underway. It would
seem the Liberal Donors have cost the Liberals another majority government
after the next election, but at least these firms will be well financed with
over $100 million in their bank accounts.
Works Cited
“Auditor General’s Report 2004.” CBC News. 11 February 2004.
Online. Internet. 15 February 2004. Available: http://www.cbc.ca/news/background/auditorgeneral/report2004.html
Canadian Press. “’Shocking’ misuse of public funds: Martin launches
public inquiry.” Toronto Star. 10 February 2004 . Online. Internet. 15 February 2004.
Available: http://www.thestar.ca/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&call_pageid=971358637177&c=Article&cid=1076411365455
Hebert, Chantel. “PM errs in
first major crisis.” Toronto Star.
13 February 2004: A1 & A7.
“MP predicts charges in sponsorship scandal” CBC News. 14
February 2004. Online. Internet. 15 February 2004. Available: http://www.cbc.ca/stories/2004/02/14/public_accounts020414
Links
Auditor General of Canada - www.oag-bvg.gc.ca
CBC – www.cbc.ca
CTV – www.ctv.ca
Government of Canada – www.canada.gc.ca
National Post – www.nationalpost.com
Toronto Star – www.thestar.ca
RCMP – www.rcmp-grc.gc.ca
