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Guite can't explain ad firms' work on $78,000 contract

[PoliticsWatch posted 3:45 p.m. November 8, 2004]

Chuck Guite, the former director of the sponsorship program, testifies at the Gomery inquiry on Monday. 

OTTAWA — Chuck Guite, the former director of the sponsorship program, had difficulty explaining to the Gomery commission Monday exactly what two ad agencies did for $78,000 they received after transferring money to Canada Post in 1999.  

When Commission counsel Neil Finkelstein asked him point blank what did Lafleur Communications do, Chuck Guite said, "I don't know."

"We'll you paid them $78,000 to do something," Finkelstein added.

"I was paying them a commission on the sponsorship," said Guite. "I don't know. I'd have to go back and review the file. I can't say anymore on this issue.

"It was commission. But there was more work being done on that project by Communication Lafleur than transferring money to Canada Post."

After reviewing contract documents during an afternoon break, Guite said the documents did not shed any further light on exactly what work was done.

Lafleur Communication and Media I.D.A. Vision collected over $78,000 in commission from the transfer of funds from Guite's Communications Co-ordination Services Branch (CCSB) to Canada Post for a stamp competition in 1999. 

Auditor General Sheila Fraser's report into the sponsorship program said the two agencies received the commissions "simply for transferring the money." 

"We do not understand why CCSB did not pay Canada Post directly and avoid paying the commissions," Fraser's report stated. "CCSB's contract with Lafleur provided no indication of the extent of visibility the government expected to receive for the $521,739." 

When pressed what the ad agencies did for the money, Guite had difficulty remembering. 

At first he testified the ad agencies were used because they "managed the process" and to ensure the sponsorship received visibility. 

But Finkelstein and Justice John Gomery raised questions about why an ad agency had to be used to ensure a Crown Corporation was displaying the Canada wordmark when it's corporate logo already carries the wordmark. 

"It's ludicrous to think you have to pay Canada Post to advertise the fact it's a Canadian federal institution," said Gomery. "The whole idea is a joke.

"I find this sort of hard to fathom." 

Although Guite could not immediately explain what exactly Lafleur did for the money, he denied it was money for nothing. 

"To say Communication Lafleur got so much money for doing nothing, I don't really agree," he said. 

But Gomery said Guite's view of the work done by Lafleur was in direct contradiction of the findings of the Auditor General who said the ad agencies simply transferred the money. 

Not only did the Auditor General have questions about the involvement of the ad agencies in the transfer of funds, she also questioned the government's decision to sponsor the event. 

Lafleur received another $516,000 of the $521,000 Canada Post was granted to work on the competition. Even though Canada Post requires competitive tendering for contracts of that size, Lafleur was given a sole-source contract from Canada Post. 

Canada Post officials told the Auditor General the decision to go with Lafleur was based on the quality of services Lafleur had provided in the past. 

Canada Post hired Lafleur Communications to manage the project and to find funding partners for it. Lafleur only found one funding partner, Guite's Communications Coordination Services Branch, which operated the sponsorship program. 

Testifying at the Public Accounts committee earlier this year, former Canada Post president Andre Ouellet defended the sponsorship grant and said his corporation was entitled to sponsorship money like other organizations. 

When Liberal MP Shawn Murphy told him the whole funding arrangement did not look good, Ouellet agreed. 

"I accept that it does not look good and especially the way the Auditor General presented it did not look good," he said.  

: Related Links

> Chuck Guite: Up Close and Personnel

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