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Top Five Scandals of 2004 

[PoliticsWatch posted 4:30 p.m. December 17, 2004]

Justice John Gomery oversees the inquiry into the sponsorship scandal 
(Photo courtesy Jake Wright www.jakewright.ca

It was quite a year for scandal watchers in Ottawa.    

At one point it seemed each new week would bring a new scandal.

In fact, as this feature is being written, the morning newspapers are full of reports of a new scandal involving an Immigration department bureaucrat who allegedly sold immigration approvals to Arabs for as much as $25,000.

Cronyism, queue jumping, clerical error, rogue bureaucrats, mad as hell and graft were all taken out and used around Ottawa this year as the scandals continued to pour in unabated.

PoliticsWatch presents its picks for the top five scandals of 2004. 

1. Adscam

The scandal that ended the hopes of a fourth Liberal majority is the choice for scandal of the year.

What other scandal has spawned an auditor general's report, a rare parliamentary committee inquiry and a judicial inquiry?

How $100 million in federal government sponsorship money ended up going to a few, select ad firms with little or no documentation has not been fully answered by the auditor general or the Commons public accounts committee.

But the judicial inquiry headed by Justice John Gomery is beginning to scratch the surface after testimony from witnesses in Ottawa over the past three months.

Testimony at the Gomery inquiry to date has suggested that the involvement of senior Chretien cabinet ministers and PMO officials in the direction of the program was more prevalent than had previously been reported. 

Both Chuck Guite, the director of the sponsorship program, and Ran Quail, deputy minister of the Public Works department at the time, testified that former public works minister Alfonso Gagliano and former Chretien chief of staff Jean Pelletier often had the final word on which programs received sponsorships and which ad agencies received commissions.

And in its final week of hearings this year, television producer Robert Scully, whose company received $11.5 million in sponsorship money, testified that four ad firms that received $350,000 in commissions on one of his projects did no work for the money. 

He also testified that soon after receiving sponsorship grants he was approached at least a dozen times by persistent Liberal Party fundraisers.

Scully's testimony seems to provide credence to two of the opposition's claims about Adscam -- the ad firms did no work for their money and that some of the money was funnelled back to the Liberal Party.

While the Gomery inquiry has not been the media circus that was the Public Accounts committee, things are expected to heat up in the new year when Prime Minister Paul Martin and former prime minister Jean Chretien are set to testify.  

2. Champagne Living

It's more expensive than the sponsorship scandal, but receives far less media attention and hasn't made the PM publicly say he's "Mad as hell" about it or call for an inquiry. 

The Hewlett-Packard-DND scandal, where $146 million was spent for computer maintenance subcontract work that never happened, comes in at No. 2 for the year.

No one has been charged, but over the summer the Departmen tof National Defence and Hewlett-Packard announced they were suing the bureaucrat at the centre of the scandal, Paul Champagne.

Earning just a $58,000 annual salary working for the Defence Department, Champagne somehow was able to garner $20 million in investments and real estate over a 10-year period, including a $1.4 million home with tennis court and a gym just outside of Ottawa, a home on a golf course in Florida, a $2 million beachfront mansion in Turks and Caicos, and an 11.9 per cent stake in the publicly-traded company WorkStream Inc. 

Champagne says he amassed his empire from good investments and some luck at Las Vegas casinos. 

A National Post feature in July provided an in depth explanation of how the scheme worked from a lawyer of one of the firms involved, RMC Systems. 

The lawyer alleges Champagne arranged a phoney invoice scheme when he posed as a defence consultant and asked RMC to handle billings and collections for a 15-per-cent commission. 

Whenever the firm's accountants asked Champagne to provide details about the work that was done, he would allegedly reply by saying, "The documents and backup data are there if necessary, but you don't have the security clearances to see it. This is top secret."

Officials at Hewlett-Packard also said they were duped in the scheme for the same reason. 

"It was a unique situation, involving a unique customer. No other Canadian client could credibly declare subcontract work top secret and get away with it," a company spokesman told the Post. 

3. Strippergate

Question period has become the Judy Sgro show over the past two months as the Conservatives pepper the Immigration minister on a daily basis with questions about preferential Immigration treatment being given to her campaign supporters. 

The Sgro scandal, which comes in at No. 3 for the year, appears to have no end as each week brings a new revelation from CanWest Ottawa bureau chief Robert Fife, National Post reporter Andrew MacIntosh or the Toronto Sun.

Speculation around Ottawa is that Sgro may be being ambushed by a former insider who was among the large number of staffers she let go after the federal election. 

When Parliament returned after a brief Remembrance Day recess, news reports surfaced about how Sgro fast tracked the immigration case of a Romanian stripper who volunteered on her campaign. The same story also reported that a pizza delivery man who gave pizzas to her election campaign was wanted on a warrant. 

But it didn't end there. 

Since the scandal broke, an NDP MP has accused Sgro's staffers of hinting that any immigration problems he brings to the minister could be overlooked if he continued to pressing the issue with the media. 

It was also learned that a Sgro staffer held meetings at strip clubs with two separate strip club owners who were looking to bring in dancers from foreign counties 

And Sgro's office recently returned a $5,000 cheque to a campaign donor who indicated he was issuing the donation on behalf of someone else, which is not allowed under election laws. 

Naseer Sadiq, a leader in the Ahmadiyya community and who is on Sgro's riding executive, received the $5,000 receipt. Sgro told reporters she approved ministerial permits during the campaign for members of the Ahmadiyya community and granted travel permits for Ahmadiyyans to come to Canada for a convention. The National Post reported  that Sgro attended one of those events on June 21, the same date that appears on the cheque.

Some aspects of the scandal are being investigated by Ethics Comissioner Bernard Shapiro. 

The Sgro controversy is a high-stakes game for both Shapiro and the prime minister.

Shapiro, whose predecessor Howard Wilson was called a lap dog of the PM by critics, will be bringing his first report involving a cabinet minister at the centre of a scandal forward. How he rules on the case will be watched closely by the media and opposition.

And for the PM, he wants to avoid at all costs having to have a minister step down because of a scandal. If Sgro has to go, she would be the first Paul Martin cabinet member to do so and it would continue a Liberal pattern that began in the final years of the Chretien era.

4. CSL

In his first week in the House of Commons as prime minister, the PM had to face repeated questions about the amount of business his family company conducted with the federal government.

This came after the government revealed the total amount was $161 million, not the $137,000 a previous Order Paper response had suggested. 

The PM blamed a clerical error on the large discrepancy, but it dominated question period and the PM's media appearances in the first week the House returned in February. 

The story was quickly knocked off the agenda after a week when the auditor general's report on the sponsorship program was released. 

The PM had referred the discrepancy in the amount of business to the auditor general to investigate. 

In November, Sheila Fraser said the final figure the government gave was "reasonably complete," but she added she could not guarantee if it was the final amount because of a lack of cooperation from some government organizations.

NDP Leader Jack Layton took issue with the government's reporting on the business relationship between Martin's family firm and the government.

"Companies were excluded, whole departments were excluded, port authorities were excluded, the very place where one would expect a shipping magnate to deal with the government," he said.

5. General Bureaucratic corruption

The final pick for scandal of the year is the death by a thousand cuts, which is the general corruption found in federal departments over the past year. 

This includes:

> A bribes-for-permit scheme in the department of Immigration in which some Arab immigrants paid as much as $25,000 for bureaucrats to fast track or approve their claims. 

> A former Privy Council Office administrative assistant sentenced to a year of house arrest for stealing $16,000 by forging phoney travel advances. 

> A top Canadian diplomat in Beijing resigned following reports he is being investigated for having sought bribes ranging from $10,000 to $20,000 in exchange for visas from already rejected Canadian student visa applicants  

> A lack of proper screening and patronage for the federal government's appointments to the Immigration and Refugee Board. 

:: PoliticsWatch Election Archive

> Another Summer of Scandal 
Many More Hot Scandals and Scams 
Summer of Scandal 

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