Liberal Party of Canada sponsorship scandal
The Liberal Party of Canada sponsorship scandal was made public in early February 2004 by Auditor General Sheila Fraser. In her Auditor General's report, she revealed that up to $100 million of the $250 million spent on the sponsorship program from 1996 to 2001 had been paid for little or no work. The funds were apparently diverted to allies of the Quebec branch of the federal Liberal Party.The sponsorship program, conceived in 1996, was a response to Quebec's nearly successful secession referendum in 1995. Funds were allocated to promote Canada through cultural and sporting events in Quebec, where separatist sentiment was still strong.
The sponsorship program's shady use of funds was first brought to public attention in 2002 when it was revealed that a number of sponsorship deals for events in Quebec were mishandled. Money was paid to marketing firms for events that were never sponsored, and standard vetting and bidding procedures were ignored. The most notable firm to benefit from the program was Montreal's GroupAction. This revelation forced the resignation of Minister of Public Works Alfonso Gagliano, who was made ambassador to Denmark. Another company, Groupe Polygone, was later alleged to have been given $40 million in dodgy contracts.
The scandal reemerged into the public spotlight in February 2004 when the Auditor General's investigation of the affair was revealed. She blamed not only Public Works, but powerful Crown Corporations including VIA Rail and Canada Post. Given the scandal's breadth, the report also raised question as to what involvement, if any, the Prime Minister's Office played in the misuse of funds. The report found that over $100 million (Canadian) was misused.
New Prime Minister Paul Martin responded to the report by immediately firing Gagliano from his position in Denmark and launching a public enquiry in to the matter. Martin, who was Finance Minister from 1993 to 2002, has insisted the scandal was orchestrated by a very select group of individuals and that he had no knowledge of their actions. In a further attempt to distance himself from the scandal, he blamed the problems on the previous administration of Jean ChrÃÂétien, under which the spending occurred. (A number of the people most closely embroiled in the scandal are ChrÃÂétien loyalists, such as CEO of Canada Post AndrÃÂé Ouellet and head of VIA Rail Jean Pelletier.) Martin also apparently put his job on the line by stating, "Anybody who is found to have known that people are kiting cheques, that people are falsifying invoices -- me or anybody else -- should resign." [1] Opposition critics have alleged that Martin could not have been unaware of the activities, as he was Finance Minister, a senior Quebec cabinet minister and a member of the Treasury Board during the time of the scandal.
In the weeks following the Auditor General's report, it became clear that the expected spring election would be affected in some way. Some argue that voters should know the outcome of the enquiry before going to the polls, in order to have an informed decision; others believe the Martin government should not continue for long without seeking a mandate.
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- February 10 - Auditor General Sheila Fraser's report reveals up to $100 million of the $250 million sponsorship program was awarded to Liberal-friendly advertising firms and Crown corporations for little or no work.
- Prime Minister Paul Martin orders an inquiry and fires Alfonso Gagliano from his post in Denmark.
- February 24 - Martin suspends Business Development Bank of Canada president Michel Vennat, VIA Rail president Marc LeFranÃÂçois and Canada Post president AndrÃÂé Ouellet giving each an ultimatum to defend themselves or face further disciplinary action.
- February 27 - Past Olympic gold medalist Myriam BÃÂédard reveals she was pushed from her job at VIA Rail for questioning billing practices. VIA Rail chairman Jean Pelletier publicly belittles BÃÂédard and calls her pitiful.
- March 1 - Pelletier is fired.
- March 3 - Jean Carle, a close confidant of Chretien and his former director of operations, surfaces in close connection to the sponsorship initiative.
- March 5 - LeFranÃÂçois is fired.
- March 12 - Vennat is fired.
- March 13 - An unidentified whistle-blower reveals that high-ranking government officials, including Jean Pelletier, Alfonso Gagliano, Don Boudria, Denis Coderre, and Marc LeFranÃÂçois, had frequent confidential conversations with Pierre Tremblay, head of the Communications Coordination Services Branch of Public Works from 1999 until 2001. The claim is the first direct link between the scandal and the Prime Minister's Office. Coderre and LeFranÃÂçois denied the allegation. [1]
- March 18 - Gagliano testifies at the inquiry, denying any involvement by himself or any other politician; he points blame at bureaucrat Chuck Guité.
- March 24 - Myriam Bédard testifies at the inquiry. In addition to repeating her earlier assertions, she also claims that Formula 1 driver Jacques Villeneuve was given a secret $12 million payoff to wear a Canadian flag logo on his racing suit (however, Villeneuve sharply denies this allegation, calling it "ludicrous"). Bédard also testifies that she once heard that GroupAction was involved in drug trafficking.
- April 2 - Previously confidential testimony from a 2002 inquiry into suspicious GroupAction contracts is made public. In it, Guité admits to having bent the rules in his handling of the advertising contracts but defends his actions as excusable given the circumstances, saying, "We were basically at war trying to save the country... When you're at war, you drop the book and the rules and you don't give your plan to the opposition." [1]
- April 22 - Guité testifies. He claims Auditor-General Fraser is misguided in delivering the report, as it distorts what actually went on; he claims the office of then-Finance Minister Paul Martin lobbied for input in the choice of firms given contracts; and he denies that any political interference occurred, because his bureaucratic office made all final decisions. Opposition MPs decry his comments as "nonsense" and claim he is covering up for the government. [1]
- French language press gives a very different account of GuitÃÂé's testimony. La Presse healine states that GuitÃÂé is involving the Cabinet office of Paul Martin.[1]
See also