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Chuck Guite's testimony from 2002 

Standing Committee on Public Accounts COMMITTEE EVIDENCE number 64

Note: The unedited transcript of this in camera meeting is made public pursuant to Committee Order made on April 1st, 2004 (37th Parliament, 3rd Session, Meeting No. 19).
* (1600) 

The Chair (Mr. John Williams (St. Albert, Canadian Alliance)): I think everybody is gone, except staff, switching, and translation, and so on. 

Now, ladies, and gentlemen, I am going to call this meeting to order.

Today, it is in camera, with audio recording, with interpretation, with switching, and transcription. 

The order of the day are, pursuant to Standing Order 108(3)(e), consideration of the Report of the Auditor General of Canada, of May 8, 2002, on Groupaction Communications.

Our witnesses today are, from the Office of the Auditor General, Ms. Sheila Fraser, the Auditor General of Canada. Assisting her is Mr. Shahid Minto, who is Assistant Auditor General, and Mr. Ronny Campbell, the Principal of the Office of the Auditor General. 

As an individual is Mr. Charles Guité, Former Executive Director, Communications Coordination Services, Department of Public Works and Government Services.

We are also joined at the table this afternoon by Mr. Rob Walsh, the Law Clerk of the House of Commons, and his assistant, Mr. Greg Tardi.

We'll start off, as we normally do on this issue, with a few pearls of wisdom from Mr. Walsh.

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Thank you, Mr. Chairman.

Mr. Chairman, most people in this room have heard this more often than they want to hear it, but to those who haven't, I'll reiterate again. It is the committee's interest, obviously, to look into the matter that's on the agenda for today's meeting, but, sensitive, as well, to the fact that there may be investigations going on by the RCMP, and matters related to the same matters under consideration today. For that reason, the committee is meeting in camera, so as to be sure that testimony obtained today is not to put to other purposes. 

I don't know that I need to reiterate beyond that to say to you, Mr. Guité, on behalf of the committee, and your counsel, that you enjoy the protections of the law of Parliament, which assure you that your testimony here today is not available for other purposes, but only for the benefit of this committee.

Mr. Williams, as Chair, will explain to you what the committee has decided relative to the in camera status of this meeting.

The Chair: Thank you, Mr. Walsh.

As I mentioned to you, Mr. Guité, before the meeting started, that the committee has moved, and adopted a motion, that the evidence given today will be held in confidence for a period of three years, minimum. If there are no charges laid by the RCMP against anyone regarding this entire investigation by the RCMP, and if charges are laid, then the testimony will be held in confidence until all court proceedings, including appeals, if any, are fully and completely exhausted.

We do intend that the testimony become public at some point in time, but certainly not in the near future.

We do not have any opening statements. The Auditor General does not have an opening statement. You don't have an opening statement, do you, Mr. Guité? You do. Okay. Therefore, I'll you to present your opening statement.

Mr. Guité.

Mr. Charles Guité (Ancien Directeur général, Services de coordination de communications, > À titre individuel): My only comment is as stated by Mr. Walsh on the minutes of June 4, on page 8, that as a former public servant, I have to respect oaths of confidentiality. I quote a comment made in those minutes, ``A former public servant, I'm not sure if it's the case, I wouldn't be surprised if it is the case, that they have a continuing obligation to respect confidentiality in matters they have learned while in the public service.'' 

Based on that, Mr. Chairman, I will decline today to answer any question that relate to discussions that I may have had with ministers. It will require ministerial authorization for me to disclose any discussions I've had with ministers prior to answer any questions that will deal with discussions with ministers.

Thank you.

The Chair: Thank you very much, Mr. Guité. We respect that--is it a right, or a privilege--whichever it may be. If you feel that any questions invoke that privilege, you would just invoke that privilege, and we'll just move from that point forward. If you feel that, with the oath that you have taken, as a public servant, that you cannot break the confidence with discussions with the ministers, feel free to invoke it, and I will support your right to be protected by that oath.

Mr. Mayfield, eight minutes please.
* (1605) 
The Chair: Mr. Mayfield.

Mr. Philip Mayfield (Cariboo-Chilcotin, Canadian Alliance): Thank you, Mr. Guité.

I was interested in your opening statement that you will not be mentioning anything that transpired between you, and the minister. Is that an obligation of yours that you cannot do that?

Mr. Charles Guité: No, it's to respect confidentiality that I had as a public servant.

Mr. Philip Mayfield: I see. Does that put you an obligation not to discuss that?

Mr. Charles Guité: Yes, it does.

Mr. Philip Mayfield: I see. So if we wanted that information, where would we get it? Would we have to go to the minister or the former minister to get that information?

Mr. Charles Guité: No, as long as I get authorization from the minister to discuss those issues, then, I will do so.

Mr. Philip Mayfield: So we could perhaps ask the questions and then you have you get authorization and invite you to come back again. Is that the way it would work?

Mr. Charles Guité: That could be a solution, yes.

Mr. Philip Mayfield: Perhaps in writing. Is that the way to do it?

Mr. Charles Guité: That's fine.

Mr. Philip Mayfield: Okay.

It strikes me, Mr. Chairman, with this kind of a difficulty, we may need, as a committee, to later discuss the need to have a minister here to answer these questions and these issues--or former minister, as the case may be. I'm asking the committee to consider that for that time being. But in the meantime--

The Chair: In response to that, Mr. Mayfield, I think we have to wait and see how much is invoked by Mr. Guité.

Mr. Philip Mayfield: I agree, I agree.

The Chair: We'll make that decision perhaps later on in the meeting.

Mr. Philip Mayfield: I agree with that entirely.

The Chair: Okay.

Mr. Philip Mayfield: Now, Mr. Guité, we're discussing today, I believe, only three contracts that have been looked at by the Auditor General and her people. One of the interesting questions she raises is that in the first contract there was a ceiling or limitation of expenditure of $250,000, and then later that was amended and it was doubled.

Can you explain why that amount was doubled, please?

Mr. Charles Guité: Yes, I can. When I first issued the first contract and I asked for a specific amount of work done, Groupaction in Montreal started the work. Halfway through the process I had some discussions with them and they indicated they could not complete the work on the amount. After some lengthy discussions with them, it was decided it would probably take double the amount. Therefore, I instructed, if I remember right, one of my staff to increase the contract by $250,000.> 

Mr. Philip Mayfield: Now, would that have been a decision that you made personally? Or would that be a decision that you made after discussing it with other employees who reported to you, or perhaps to members of the department whom you reported to?

Mr. Charles Guité: No, there was discussion with some of my staff and myself and I made the decision.

Mr. Philip Mayfield: And you made the decision, okay.

Now, in paragraph 29 of the Auditor General's report, it's mentioned there that >
 "there was verbal advice, discussion and strategic information provided to him...> "> --and I presume that > "> him> "> is you--> "> ...about events that the government could sponsor.

Could you describe the nature of that advice, please? The Auditor General has said that she can find no record of that advice in the files that her people were looking at.
* (1610) 
Mr. Charles Guité: Well, let me make the following comment--and contrary to the Auditor General's comment, every rule in the book was not broken. During the referendum of 1995 my office was requested by the Federal-Provincial Relations Office to hold a competition--I have to be careful here the term I use--and to follow a bit of the guidelines that exist in the rules, but I may have to, for a better term, bend them a little bit, because, as you all can understand, we were basically at war trying to save the country. We, and FPRO, invited approximately 10 firms, which is documented, there's a scope of work, to present to us, as a committee, what they could do to help us win the referendum in Quebec--which they did. Based on that, we retained five firms. Those five firms were issued contracts and, in fact, helped us to win the referendum.

Subsequent to the referendum--obviously, as we all know in this room, it was a close call--I was asked by a committee, if I remember right, of people from FPRO, people from PCO, how we would be more visible in Quebec--the Government of Canada would be visible in Quebec and the rest of Canada, but, obviously, more in the Province of Quebec. Based on the results that Groupaction had provided to us during the referendum, I decided that was the best firm to be able to advise me on where we should be present, at what event, what visibility we should have. Obviously, we were not going to broadcast our plan and our strategy through a public tendering process and, in fact, having some information on file that could be available to the opposition.

Mr. Philip Mayfield: Now, because this was such a vital issue at the time, and I believe the Prime Minister's office, and, indeed, the Prime Minister was concerned about this and would very likely have wanted to know the progress of the actions that were being taken, who was involved, the results that were being derived of this, no one is more responsible for what happened at that time, I guess, and recovering from it than the Prime Minister, himself, and, of course, he would depend upon his government to act using Government of Canada policies. I'm wondering who was the liaison between you and the minister's office and the Prime Minister's Office to keep track of this whole program as it was going on. Can you tell us that, please, sir?

Mr. Charles Guité: No, I'll just make the following statement and I'll quote Mr. Greg Thompson at a previous meeting of June 6.

Mr. Philip Mayfield: Of which year?

Mr. Charles Guité: A couple of weeks ago--2002--and I quote, > "> Would it be fair to say that the Sponsorship Program was set up for the greatest political reasons, in all sense of fairness? In the very beginning it was obviously set up for political reasons, for the greater good of the country> "> .

Mr. Chairman, I could not have articulated it better. But my role was to deliver a program based on existing government policies--

Mr. Philip Mayfield: My question is: who is involved with you in making the decisions about perhaps slightly bending the rules, about coordinating it, which to accept and which to reject?

Mr. Charles Guité: That was my decision.

Mr. Philip Mayfield: You had no consultation with your deputy minister, with your minister, with other officials from the PMO?

Mr. Charles Guité: Based on my initial comment, I decline to go any further on that question.

Mr. Philip Mayfield: Mr. Chairman, I don't know what to do at this point. I'm not getting an answer to the question that I want. I believe there needs to be an answer. I think we need to know who was involved. I've not asked for conversations between the minister and Mr. Guité, I've simply asked who's involved. What would you suggest I do at this time?

The Chair: My recommendation, Mr. Mayfield, is that at 6.30 p.m., as you know, we are conducting a meeting on future business and that it be discussed at that point in time by--

The Clerk: Six o'clock.

The Chair: No, it was 6.30 p.m. This will go till six...anyway, after this meeting we'll be having another meeting to discuss future business and that we discuss the issue at that time.

Do you fell satisfied with that as a response?
* (1615) 
Mr. Philip Mayfield: But who, you see, who do we discuss this with?

The Chair: Okay, let me ask the law clerk a question.

Mr. Walsh, when Mr. Guité invokes this right to remain silent, does this cover any and all conversations or only those--

Mr. Philip Mayfield: This is not conversations, this is who.

The Chair: I know, but does it cover his discussions with anybody or only with ministers and advice he gives to ministers?

Mr. Rob Walsh: I'm not sure what the genesis of Mr. Guité's obligation for confidentiality is, whether it's found in a statute, a regulation or a ministerial document. But I suspect, going to the basic principles of what in common law is called master/servant, the former employer has an ongoing duty of confidentiality toward the former employer on matters pertaining to the business of the employer the former employee learned about while in the course of his employment. So there may be some nuances to be given to that relative to a ministerial department. Basically, Mr. Guité, in my view, as he has done, is obliged towards his minister to acknowledge his duty of confidentiality, but I would not have thought that within that was the very question of whether there were consultations. I would have thought that it would have applied to what those consultations were. However, that's just my judgment. I defer to Mr. Guité, who may be more closely familiar with the terms of his obligation and he may have a different interpretation, but I would have thought whether there were consultations would not be within it, what those consultations were might well be within it.

The Chair: You may confer with your lawyer if you want to confer with your lawyer on this question because Mr. Walsh has pointed out a clear difference between you can confirm the conversations took place, but the content are protected between yourself and the minister. It would seem whether or not the conversation did actually take place would be a question that could be answered.

Mr. Charles Guité: Yes, I think if Mr. Mayfield would rephrase his question so that it does not include reference to the ministers or the minister, then I can answer the question

Mr. Philip Mayfield: I'm not asking that Mr. Guité. You see, this morning Mr. Tremblay said there was a liaison process set up. What I am asking you is not what was said--

Mr. Mac Harb (Ottawa Centre, Lib.): A point or order, Mr. Chair.

Mr. Philip Mayfield: --but who was involved in that process.

Mr. Mac Harb: A point of order, Mr. Chair. This is highly out of line.> 

The Chair: We know that. This is--

Mr. Mac Harb: We sought, we wanted the in camera. We had two separate meetings, one in the morning, one in the afternoon, where the two witnesses would not hear about each other's testimony--

The Chair: Okay.

Mr. Mac Harb: --and basically that's what we're doing now.

The Chair: Mr. Mayfield's line of questioning, we're dealing with maladministration, and he is trying to find out what kind of process was in place. He is in command of a certain amount of information, which Mr. Guité may have also, and Mr. Mayfield only wants to know the chain of command.

Am I correct, Mr. Mayfield?

Mr. Philip Mayfield: I want to know why Mr. Tremblay was not able to tell us.

The Chair: Okay, well, I think, perhaps--

Mr. Philip Mayfield: --and I only refer to this because--

The Chair: Yes. Don't refer to Mr. Tremblay.

Mr. Philip Mayfield: --there was information that Mr. Guité has that was not provided earlier. I simply want to know who was the liaison? Who was that person?

Mr. Charles Guité: What I can clearly tell you is that I met on a regular basis with the minister. 

Mr. Philip Mayfield: But there was a liaison beyond that, was there not?

Mr. Charles Guité: --and I met regularly with my deputy minister. Okay? What I discussed with the minister I'm not about to say it in this meeting.

Mr. Philip Mayfield: I haven't asked you that, sir.

The Chair: Okay.

Ms. Phinney, do you have a question?

Ms. Beth Phinney (Hamilton Mountain, Lib.): Yes, I'd like to clarify with Mr. Walsh whether, when we go into a meeting and it's in camera, I presume that information is only for the people at that meeting. We have a witness here who was not at that meeting. I feel, if I've understood Mr. Walsh correctly, the information from this morning's meeting should not go to anybody else except those who are at this morning's meeting. Could you clarify that, please?

Mr. Rob Walsh: The ambit of in camera depends on what the committee wants it to have. It could well be the case that in-camera meetings, as you've indicated, persons who are not in this morning's meeting should not be have disclosed to them testimony that was given at that meeting. At the other hand, it could be the option of the committee to have this witness and his counsel covered by the same in-camera obligations with respect to what they learned at this meeting, including testimony from the morning meeting. That's an option for the committee.
* (1620) 
The Chair: I would think it advisable for all the members they stay away from specific reference to any information they gleaned or obtained from this morning's meeting so that we do not have to mention Mr. Tremblay's name. You may be privy to some information, you may have read it in a newspaper, you may have heard it from the minister in the House, there's all kinds of information available in this issue, but I think it would be best to stay away from saying, > "> Mr. Tremblay said this morning...> "> .

Mr. Walsh.

Mr. Rob Walsh: I would just like to add that I think it goes without saying that this witness and his counsel are here today attending at an in-camera session and such information they may obtain in the course of discussions at this meeting about testimony this morning is, of course, governed by the same in-camera restriction on any disclosure outside this room. I just thought I should reiterate, although you've counselled members to avoid citing evidence heard this morning, should that happen it is governed by the same in-camera restraint on everybody in the room as if it were original testimony at this meeting.

The Chair: Okay.

I'll ask Mr. Guité if there's anything further to add to Mr. Mayfield's question because your time has expired, Mr. Mayfield.

So do you have anything--

Mr. Philip Mayfield: Not entirely, that's at my disposal.

The Chair: Do you have anything further to add in response to Mr. Mayfield's question?

Mr. Charles Guité: No.

The Chair: No.
You have the floor for eight minutes, Mr. Lebel.
Mr. Ghislain Lebel (Chambly): Mr. Guité, you stated that during the referendum - which puts us in 1995 - you were asked by the Federal-Provincial Relations Office to retain five firms to help with the referendum. That> '> s what you stated. However, you subsequently said that you were satisfied with their work, that you decided to continue contracting with these firms to enhance the government' s profile and that these contracts were not put out to tender. Is that in fact what you've just stated?

Mr. Charles Guité: That's correct.

Mr. Ghislain Lebel: Therefore, contracts were not put out to tender after 1995. Correct?
Mr. Charles Guité: No.

The Chair: Did you respond to that question?

Mr. Charles Guité: Yes, I did.

The Chair: Okay, my apologies.

Mr. Ghislain Lebel: Do you know Jean Brault and Claude Lemay?
Mr. Charles Guité: Yes.
Mr. Ghislain Lebel: Did these two men work on the 1995 referendum campaign?
Mr. Charles Guité: Claude Lemay?
Mr. Ghislain Lebel: From Groupe Everest.
Mr. Charles Guité: You mean Claude Boulay.
Mr. Ghislain Lebel: I' m sorry, yes, Claude Boulay.

Mr. Charles Guité: Yes.
Mr. Ghislain Lebel: And that is when you first became acquainted with them?

Mr. Charles Guité: I didn't get to know them personally, but most of their staff...not most, but a lot of their staff were working on the campaign.

Mr. Ghislain Lebel: Later, when you were in charge of the Sponsorship Program, did you have occasion to meet with Jean Brault and Claude Boulay somewhere other than at your offices here in Ottawa?

Mr. Charles Guité: On a regular basis I met them either in their office in Montreal or in my office in Ottawa to discuss strategy. That's why, at the end of the day, we were so successful.
Mr. Ghislain Lebel: I don> '> t doubt that for a moment! Did you also have occasion to meet with them somewhere other than at your office?

Mr. Charles Guité: No. I may have lunch with them, things like that.

Mr. Ghislain Lebel: Is it possible that you met with them at Jean Brault> '> s chalet in the Eastern Townships? 

Mr. Charles Guité: No, no.

Mr. Mac Harb: A point of order, Mr. Chair.

The Chair: A point of order.

Mr. Mac Harb: I think here we are moving away from the proper line of questioning. The chalet visiting, this is completely out of line, I would suggest.

The Chair: I think your point of order is out of order, Mr. Harb, because--

Mr. Mac Harb: I don't think so. I would ask our counsel whether or not this is a proper question.

The Chair: It's the clerk we normally refer to, not the law clerk. He is entitled to ask the questions. We're trying to find out the administration of the public service in these three particular contracts, and if he were meeting the people here, there or somewhere else, I think he's entitled to ask the question.

Mr. Mac Harb: He was starting to abuse the witness.

The Chair: Okay, I'm paying attention.

Continue on, please, monsieur Lebel.

Mr. Ghislain Lebel: Therefore, you maintain that you never met with Jean Brault and Claude Boulay outside your office -- for instance, at a chalet in the Eastern Townships? 

Mr. Charles Guité: I have no comments to make. I'm here to talk about the three contracts with Groupaction.
* (1625) 
Mr. Ghislain Lebel: I would assume that you met with these men to discuss the contracts. Correct?

Mr. Charles Guité: I met them at my office or their office and, on some occasions, had lunch with them.

Mr. Ghislain Lebel:> And where did these meetings take place? 

Mr. Charles Guité: In Montreal or in Ottawa.

Mr. Ghislain Lebel: The breakfast meetings as well?

Mr. Charles Guité: In Ottawa or in Montreal.

Mr. Ghislain Lebel: I see. Were you present at meetings between Jean Brault, Claude Boulay and former Minister Alfonso Gagliano?
Mr. Charles Guité: No.
Mr. Ghislain Lebel: Never?
Mr. Charles Guité: No.
Mr. Ghislain Lebel: Fine then. I> '> d like to talk about the famous report that has gone missing. The Auditor General refers to a report that was never produced and that supposedly cost the government $575,000. The report had two components: a qualitative study and a quantitative study. Do you know anything about this report?

Mr. Charles Guité: Are you talking about the first report, the second report or the third report?

Mr. Ghislain Lebel: I> '> m talking about the second and third reports that consisted of qualitative and quantitative studies. As some point, you deviated from the qualitative aspect of the work that had been commissioned. Correct?
Mr. Charles Guité: It depends where you> '> re going with that question.
Mr. Ghislain Lebel: I want to know if you bent the rules somewhat in the case of the study that was commissioned ?

Mr. Charles Guité: Let me make the following statement. There were three reports produced by Groupaction. I have seen the three reports. I have touched them. Other people have seen them and have touched them. When I left the public service in August 1999, the reports were there. They're not there today. I can't comment any further than that. But Groupaction prepared the reports, as requested. As the Auditor General people may have commented, we may have deviated from the scope of work, but, again, for a better term, we were at war and we were not going to give our plan of attack. I requested those firms to deviate a bit from the scope of work, but, at the end of the day, look at the current situation.

Mr. Ghislain Lebel: We know what the outcome was, but you> ...> since you say you have actually touched these reports, you must have noticed that there was no qualitative analysis done, because you had in fact asked Jean Brault not to do one.

Mr. Charles Guité: No, that's exactly what I requested and I asked them to provide me verbal advice on certain strategies and certain events, that we would know who was there, who would be there, how present would be the Government of Quebec versus the Government of Canada. It was valid information and very valuable in making sure we were very visible. When I look at today's results in la belle province, I'm very proud of what we did. If I had to do it again, I'd do it better, with the experience I have gained.

Mr. Ghislain Lebel: Does the name > "> Johanne Archambault> "> ring any bells?
Mr. Charles Guité: No.
Mr. Ghislain Lebel: Yet, the reports, including those that you touched, show that you signed off on invoices submitted by Groupaction on behalf of Jean Brault and Johanne Archambault, who charged $252 and $202 an hour respectively for their services . You signed off on these invoices and payment was made. That doesn 't ring any bells?
Mr. Charles Guité: No.
Mr. Ghislain Lebel: Do you know Jean Brault's wife?
Mr. Charles Guité: Yes.
Mr. Ghislain Lebel: What is her name?
Mr. Charles Guité: Her given name is Johanne, but I don> '> t know her surname.
Mr. Ghislain Lebel: And what if I told you it was Archambault? When you went to Jean Brault> '> s Groupaction offices, did you meet his wife, Mrs. Brault?

Mr. Charles Guité: No, never at his office.

Mr. Ghislain Lebel: You never saw her at this firm> '> s offices? Yet, during a three-month period in 1999, from June 1 to September 30, she alone billed the government for somewhere between $110,000 and $115,000 for services rendered. > 

Mr. Charles Guité: No, the invoices I received from Groupaction were invoices from Groupaction and not individuals, that I can recall.
* (1630) 
Mr. Charles Guité: No, I can't comment. We're talking of contracts that go back three or four years.

Mr. Ghislain Lebel: But these details can be found in the contracts.

The Chair: Merci beaucoup.

Mr. Bryden, please, eight minutes.

Mr. John Bryden (Ancaster-Dundas-Flamborough-Aldershot, Lib.): Just a point of clarification, you said you have to respect the confidentiality of the ministers for whom you work. Does that embrace ministers before 1997, any ministers you may have dealt with in the years that you--

Mr. Charles Guité: It would involve any ministers that I've worked with or had discussions with when I was a public servant-- 

Mr. John Bryden: That's going back to...

Mr. Charles Guité: --which would be up to 1999 right back to 1963.

Mr. John Bryden: Thank you.

Now, may I ask you a very, very blunt question, just to cut to the quick here. This is referring only to the Groupaction files. Did anyone outside the department instruct you in any way to select Groupaction, tell you what to expect of Groupaction or tell you what to pay Groupaction?

Mr. Charles Guité: It's too broad of a question.

Mr. John Bryden: Well, then, let me whittle it down a little bit. Did anyone outside the department tell you what to pay Groupaction?

Mr. Charles Guité: No.

Mr. John Bryden: Did anyone outside the department tell you what to expect of Groupaction?

Mr. Charles Guité: No.

Mr. John Bryden: Did anyone recommend Groupaction?

Mr. Charles Guité: No.

Mr. John Bryden: Thank you. We covered that fairly well. It may be a broad question, but you've answered it very specifically.

One of the things that Mr. Quail brought up that was of great concern to us was the question that after the internal audit was done one of the things that was very evident was there was not adequate documentation supporting not only the Groupaction contracts but it appears to have been a general problem. Do you have any comment on that? I would have thought that someone with your seniority would have expected that the file would contain appropriate documentation for this type of contract.

Mr. Charles Guité: No, we're not going to discuss any other contract but the Groupaction contract.

Mr. John Bryden: All right, although I don't see why not because...all right, then, let's stick with the Groupaction contract, which had omissions in it.

Is this the type of expectation that you had of the files when you were dealing with other contracts, going back in history again to you are a longstanding civil servant who has been involved in many such contracts? Was the lack of documentation in the Groupaction file typical of the other contracts you might have handled?

Mr. Charles Guité: Let me repeat a comment that I made earlier. Certainly during the period of the 1995 referendum till 1999, when I left, and certainly 1995-96, 1996-97, 1997-98, 1998 and part of 1999, when I was there, as I said earlier, we were doing a strategy that we were getting results. We knew we were very effective. By not having too many documents on file obviously restricted access to that information. That decision--

Mr. John Bryden: Well, let's stick--

Mr. Charles Guité: Let me finish. 

That decision was made by me personally. Nobody instructed me not to put documents on file or not to put certain information on file. I decided that. I was very successful in achieving what the Government of Canada wanted to achieve, and that was to have a big presence in Quebec and to reduce " le parti séparatiste au Québec ", which we have done tremendously well.

Mr. John Bryden: If I may ask, though, if we were to look further back in history, before the referendum, might we find incidents of contracts that you've involved in--> 

Mr. Charles Guité: No, if you go--

Mr. John Bryden: --in which there was lack of documentation?

Mr. Charles Guité: No, I don't want to go down that road. I'm here to talk about, again, the period the Auditor General or the contract the Auditor General has picked up. What I've done from 1995 to 1990, during the previous administration and the previous and the previous and the previous, we're talking 34 years here. I can't recall-- 

Mr. John Bryden: I don't want to go back that far, but I want to at least go back into the Mulroney period to find out whether or not what we see, and the lack of documentation, which is crucial to the problem the Auditor General encountered: how can you demonstrate that something was done if there are no documents. What I would like to know is that if we were to investigate further and go beyond the referendum, and I accept that the referendum was a very crucial time, but before that would we expect to find that there isn't the documents in the file?

Mr. Charles Guité: I couldn't remember. I can't comment.

Mr. John Bryden: Well, then, let me try another thing. As an administrator, do you feel that when you let contracts that the files should be maintained to indicate the basic financial obligations are being fulfilled, the basic financial records are there? Are you in agreement that should be the minimum expectation of an Auditor General and anyone else?
* (1635) 
Mr. Charles Guité: The only comment I can make there is that when I issued a contract and I was the signing or delegated authority, I issued the contract, when I approved the payment of the service defined in that contract, I was satisfied the Crown had received value for money.

Mr. John Bryden: But, if I may ask, you didn't feel an obligation to maintain that in the actual public records, so that--

Mr. Charles Guité: I'll repeat again, during the referendum and post-referendum, it was my decision to keep very little information on file so nobody would have access to it.

Mr. John Bryden: So that includes the 1997 period. Because we got by the referendum, so the 1997...so in fact--

Mr. Charles Guité: It includes the period from the 1995 referendum till the day I left the public service in August 1999.

Mr. John Bryden: Just one other thing, if I may ask, if I still have time, Mr. Chairman.

The Chair: You have over two minutes and 15 seconds.

Mr. John Bryden: You mentioned that, obviously, you were involved in political strategy that may have involved the minister of the day, and obviously other ministers of the day going back, as well, presumably, because the referendum, and I note, occurred at a time of an entirely different minister then was there in 1997. Did you involve Mr. Quail or is Mr. Quail involved in these discussions, these--

Mr. Charles Guité: On several occasions he was, yes.

Mr. John Bryden: Was he always involved?

Mr. Charles Guité: Pardon?

Mr. John Bryden: Was he always involved?

Mr. Charles Guité: I would say most of the time he knew what events we were sponsoring because he would get a list of the events that we were sponsoring.

Mr. John Bryden: Mr. Quail was in the group so you had no discussions with the minister that Mr. Quail was not privy to?

Mr. Charles Guité: I can't comment on that, based on my initial statement.

Mr. John Bryden: Again, I guess the verbal arrangements you received...you made arrangements verbally with Groupaction, am I to understand that?

Mr. Charles Guité: That's correct.

Mr. John Bryden: Again, I have difficulty. Is it not true that these arrangements...are you familiar with the Access to Information Act?

Mr. Charles Guité: I sure am.

Mr. John Bryden: > Are you aware, then, that if you had made arrangements and documents were produced that would compromise national security or not in the national interest, there's section 22 of the Access to Information Act, for example, that would protect documents that y> ou may have receive that pertained to direct government operations, advice to ministers? Surely the Access to Information Act would have given you ample opportunity to have created a documentary record and not to be worried that it would be disclosed to the separatist adversaries, whoever they were.

Mr. Charles Guité: Hindsight is 20:20.

Mr. John Bryden: If I may just, then, ask the final question, now, if you were to do it over again, you would have created the records and you would have relied on the Access to Information Act to protect the secrets?

Mr. Charles Guité: Probably, probably. But again, you have to remember--and again I'll use the terminology--when you're at war you drop the book and the rules and you don't give your plan to the opposition. You don't leave your plan of attack on your desk.

Mr. John Bryden: Mr. Guité, I have enormous sympathy for that response, except that if you block me, as a member of this committee, from knowing whether or not your behaviour with respect to documentation did or did not exist before the referendum crisis, then I can never satisfy myself that you acted entirely in the public interest in not keeping properly documented records.

Mr. Charles Guité: The only comment I can make there is go and check the documents prior to 1995.

The Chair: Thank you, Mr. Bryden.

Mr. Martin, eight minutes, please.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you, Mr. Guité.

The eight minutes goes quickly, so I'm going to be quite brisk with this, as well.

There is an aspect to every contract that has an account verification checklist that you are probably familiar with. When you signed off on this contract you would have also had to go through that page to check off that the work has been performed, the goods have been supplied, and the services have been rendered, and then you check that box off.

Mr. Charles Guité: I have never used a form like that before I sign an invoice.

Mr. Pat Martin: Well, that's odd because it's an aspect of all of the Groupaction contracts. We have one, two, and three here, and that page shows up in every one of them. Two were signed by you, and one was signed by Mr. Tremblay, so, somebody, maybe one of your underlings, then, has to go through that checklist, because here it is, checked off.

Mr. Charles Guité: The way the system works, the way I know it works in our department when I was there is, if I got an invoice on my desk for payment, and certainly the invoices for the sponsorship program, I was aware that the work had been done--
* (1640) 
Mr. Pat Martin: How do you know?

Mr. Charles Guité: How do I know? Because I was on top of every event.

Mr. Pat Martin: And you believe that you got true value at every one of these contracts? 

Mr. Charles Guité: Exactly.

Mr. Pat Martin: Even the ones that we can't find any evidence of any work having been done. 

Mr. Charles Guité: The evidence was there when I was there as a public servant. If it's not there today, I can't answer that question.

Mr. Pat Martin: There's a growing body of evidence, Mr. Guité, that would indicate that there was overcharging, and even charging for work that possibly wasn't even performed so that those companies could bank credits to be recouped at a later date, or pay off, services during the 1997 federal election in Quebec. 

Do you have any knowledge of that?

Mr. Charles Guité: Any political things, I decline to answer any comments on the politics, I'm not involved in politics.

Mr. Pat Martin: Did anybody from the Prime Minister's office ever contact you regarding the partnership initiative, or the sponsorship contract?

Mr. Charles Guité: No comments based on my initial statement.

Mr. Pat Martin: Jean Pelletier is not a minister you worked for. Did Jean Pelletier call you from the Prime Minister's Office?> 

Mr. Charles Guité: No comments based on my initial comment.

Mr. Pat Martin: Actually, your initial comment talked about the duty of loyalty towards former ministers. These are not ministers in the Prime Minister's Office.

Mr. Charles Guité: The minister's office, and the minister and his office, and staff in his office, fall under my definition of the minister's office.

The Chair: Let me ask this question.

Mr. Walsh pointed out the employer-employee relationship, and the need for confidentiality, and the respect for that confidentiality, but how wide are you drawing this employer umbrella, because now you're saying--

Mr. Charles Guité: My umbrella, Mr. Chairman, is very clear. If any discussions I've had--I'll give you two examples--if I had a discussion with the Minister of Public Works, or his staff, that falls under my initial statement.

The Chair: His political staff.

Mr. Charles Guité: His political staff. If I had a discussion with the Minister of Finance, I include his staff. If I had a discussion with PMO, I include the Prime Minister, and his staff. 

The Chair: Okay. So any political staff working for any cabinet minister, you are claiming privilege?

Mr. Charles Guité: Exactly.

The Chair: Is that a legitimate claim, Mr. Walsh?

Rob Walsh: All the ministers, whether the Minister of Finance, the Minister of Public Works, or the Prime Minister, are part of the government of Canada at the ministerial level and the same duty of confidentiality to the government remain.

Mr. Guité's duty of confidentiality is to the government of Canada, as opposed to a particular minister of the crown, so, the same confidentiality continues when there might be a change in the person occupying the position of Minister of Public Works, etc. 

I think it's a matter one might well question as to what the proper ambit of this confidentiality is. We're hearing today testimony relating to the some of the dealings within the office, but, then, selectively, we're not hearing about other dealings. I'm just not sure, to be frank with the committee, I'm not so sure whether the application of the confidentiality rule here isn't being applied for--and I don't mean to be disrespectful here, Mr. Guité--but isn't being applied for self-serving purposes, as opposed to out of a sense of duty to the government of Canada. 

That's something I'm not in a position to judge, I don't know.

The Chair: Mr. Walsh, what about discussions with staff of a minister, which are political staff, there is no master-servant relationship between Mr. Guité, and them. Is that covered by privilege, too?

Mr. Rob Walsh: The confidentiality, as opposed to privilege-- 

The Chair: The confidentiality.

Mr. Rob Walsh: --that Mr. Guité is talking about, I think the political staff of a minister are to be taken as surrogates of the minister, and they are speaking with him on behalf of the minister. I think one would have to acknowledge that conversations with the aides to the minister are covered by the same confidentiality obligation as would be direct conversations with the minister himself.

The Chair: Any further questions on this particular issue to Mr. Walsh?

Mr. Harb.

Mr. Mac Harb: Mr. Walsh, my understanding is that the witness is before the committee, the witness would sit here, and tell you, yes, and, no, and he would have fulfilled his duty to the committee. It is my understanding that we cannot just take a hammer, and start hitting on the head of the witness in order to force him to say things he doesn't want to say.

My understanding is that at the outset he has clearly stated that, yes, he had dealings with the minister, and, his, or her, staff, and thus said, he is not going to enter into a detailed debate about the content of those discussions. > 

Would it be your advice for us to move off that particular element now, rather than repeating ourselves every 30 seconds, and ask the same question all over again?

Mr. Rob Walsh: Well, 

The Chair: The members are entitled to ask the questions, and Mr. Guité is entitled to answer them as best that he sees fit, or claim the privilege of confidentiality, and say he cannot answer. He has to hear the question before he can make a decision.
* (1645) 
Mr. Mac Harb: Mr. Chairman--

The Chair: Anyway, we'll now get back to Mr. Martin.

Oh, Mr. Mayfield.

Mr. Philip Mayfield: Mr. Walsh, it's a matter of concern for me to know how to decide whether Mr. Guité's answers are fulfilling the committee's need to sort out the administrative difficulties that we have encountered, or, whether or not, his answers are more to serve his own particular needs. I'm having difficulty deciding how to approach this.

From your legal point of view, how do we deal with a witness who is simply protecting himself in the name of confidentiality with someone else?

Mr. Rob Walsh: Mr. Chairman, may I suggest to members of the committee that they focus on whether the answers received are responsive to their questions, rather than whether or not the witness is driven by self-serving considerations, or not. The issue is whether the answers are in response to your questions. If they are not responsive to your questions, by virtue of the indication of confidentiality, then the next step might be to consider calling upon the minister to provide the information that this witness is not prepared to provide.

The Chair: Just one final point on that, Mr. Walsh, when we're talking about some fairly wide-ranging number of people involved in discussions, it is perfectly legitimate for Mr. Guité to say who he had the discussions with. The content of the discussions is what is protected by confidentiality. Am I right? 

Mr. Rob Walsh: That, as I said earlier, would be my view of it, but, others might take a different view.

The Chair: Okay.

Mr. MacKay, do you have something?

Mr. Peter MacKay (Pictou-Antigonish-Guysborough, PC): Mr. Chairman, as a supplemental to your question, Mr. Chair, to Mr. Walsh, that, would therefore include people who worked directly for ministers, or the Prime Minister, we should be allowed to ask whether, in fact, Mr. Guité had conversations with those individuals, not the content, but whether, in fact, there was contact made between persons working in ministers' office, and whether conversations happened, or did not happen. Correct?

The Chair: Mr. Walsh.

Mr. Rob Walsh: That would be my view, Mr. MacKay, but, it may be that others have a different view.

The Chair: Mr. Bryden.

Mr. John Bryden: I would like to make a comment, Mr. Chairman. 

The issue should be centred on the administration, not the minister's office. I think we have to make a distinction here, that this committee is charged with examining whether or not Mr. Guité failed, or, succeeded, if you would, in the tasks that were set before him as an administrator. Obviously, he is in contact with the political arm of government in one way or another, but, that's not really the focus of the committee. It's whether or not he administered the department in a way that is commensurate to his responsibilities.

The Chair: It seems to me, Mr. Bryden, that Mr. Guité has found himself in a conflict, and I think the line of questioning is quite legitimate. He found himself in a conflict of, he felt the rules, because he was at war, using his terminology, the rules could be bent, using his terminology, and therefore, we now find ourselves in this particular situation. The rules were bent, it appears, because the government had a particular policy that it wanted to implement, and he has talked about that particular policy this afternoon.> 

I think we are into a very difficult, and sensitive area between political desires, and public policy, and the implementation according to the Financial Administration Act, and the rules of contracting, and so on. There seems to be, from what I'm hearing, a direct conflict between the two, and Mr. Guité is right there in the middle, and was at both sides. Therefore, I think it's appropriate that we would find out who the political discussions were with in order for us to determine at what level was this decision made to bend the rules, if I can use his terminology, and so on.

I think we're going to start the clock again. Mr. Martin, we're going to hand it back to you, and continue on, because you have--is the time taken up?

Mr. Odina Desrochers (Lotbinière-L> '> érable, BQ): Just 30 seconds, sir.

The Chair: Mr. Desrochers. 

Mr. Odina Desrochers: Mr. Chairman, to avoid a recurrence of the same problem, with Mr. Walsh> '> s assistance, perhaps we could seek written clarification of the point Mr. Guité is making. There seems to be some confusion over the interpretation of Mr. Guité> '> s position, versus Mr. Walsh> '> s take on the situation. Therefore, without presuming who our next witnesses will be or when our next meetings will be held, perhaps we should get some clarification of what Mr. Guité is referring to, so that Mr. Walsh can better enlighten us.
* (1650) 
The Chair: I think we'll go to Mr. Martin now.

Mr. Martin, you've used up two minutes, and twenty-two seconds, so you have five minutes and thirty-four seconds, or thereby, left.

Please continue.

Mr. Pat Martin: Thank you.

Mr. Guité, you mentioned that you don't really agree with the Auditor General that senior officials, or you, broke all the rules, was the quote.

Do you believe that you were operating within the policy guidelines of public works when you were awarding the Groupaction contracts?

Mr. Charles Guité: Yes.

Mr. Pat Martin: So you don't accept that you broke all the rules. 

There's a contract here that you've signed, for $615,000 to Groupaction to analyze the effectiveness of Ottawa sponsorship of outdoor events, and to present an analysis of opportunity to the federal government to enhance its visibility. 

This contract was awarded without competition. Did you authorize this contract, by the way?

Mr. Charles Guité: No. Let me go back.

The contract was not awarded without competition. There was a competition done in 1995, during the referendum, where we qualified five firms out of about ten we interviewed, if I remember correctly.

Mr. Pat Martin: I understand that part of it. I don't have time to go through all that--

Mr. Charles Guité: But, based on that, I decided to use Groupaction to do subsequent work, and the work includes-- 

Mr. Pat Martin: --the three qualified contractors.

Mr. Charles Guité: --and the work includes the three contracts.

Mr. Pat Martin: Right.

Now, this $615,000 contract produced a 20-page paper listing projects that wanted government money. Do you believe that was good value?

Mr. Charles Guité: The report was probably one-tenth of the advice that I received from Groupaction.

Mr. Pat Martin: The other advice was oral?

Mr. Charles Guité: That's correct.

Mr. Pat Martin: For $615,000.

Now, Groupaction, within your own policy guidelines, you say you didn't bend the policy guidelines, there's a maximum amount that a person can bill themselves out as. The director of a communications contracting firm can bill themselves out at a maximum of $150.00.

Mr. Charles Guité: No, not that I'm aware of.

Mr. Pat Martin: Well, it's right here. I can show you where that's the case. In fact, it specifies even what the secretary and the clerical staff can be charged out at, a maximum of $25 there. > 

In the invoices that you signed, Brault was signing himself out at $252 per hour. Lyse Georges was $227 per hour, far in excess of the maximum in your own policy guidelines.

Mr. Charles Guité: No. I can't remember that there is a set amount that agencies can charge. In fact, in my experience of all the ad agencies, and the communication agencies I've done business with in the last 34 years, rates vary from agency to agency. If you're going to hire the top executive of a major advertising firm versus the top executive of a very small firm, you can be sure that you are going to pay different rates, and those rates can vary 100% to 150%.

Mr. Pat Martin: Where is the accountability, where is the transparency in a situation where you spent $615,000 for a 20-page report, and the rest of the benefit was verbal, over the telephone advice. How does the public know their money is being spent well, and accounted for when it's on the basis of a phone call between you, and I presume, the head of Groupaction?

Mr. Charles Guité: The proof is in the pudding. Look at the results of what we've achieved in la belle province

Mr. Pat Martin: Do you own a red Mustang, Mr. Guité?

Mr. Charles Guité: No.

Mr. Pat Martin: Did you used to?

Mr. Charles Guité: Yes.

Mr. Pat Martin: Did you sell it?

Mr. Charles Guité: That has nothing to do with this committee.

Mr. Pat Martin: Did you sell it to Groupaction?

Mr. Charles Guité: That has nothing to do with this committee.

Mr. Pat Martin: Yes, it does. We're trying to illustrate, we're trying to--

The Chair: events, you can indicate what this vehicle has to do with maladministration in the government.

Mr. Pat Martin: We believe it would be improper to have a relationship with one of these contracting firms, above and beyond, just a professional relationship.

We have been told, and we would like you to be able to confirm it, that when you sold your red Mustang, you sold it to Groupaction, or at least at Groupaction to help you out from out of these heavy payments.

The Chair: Okay, now, just a second, Mr. Martin.

Mr. Martin has asked a question about whether there's some financial transactions between--

Mr. Pat Martin: Of benefit accrued.

The Chair: --the civil servant, Mr. Guité, and a client he was dealing with, which was the Groupaction. It doesn't seem to be that much different than what Mr. Boudria got himself into a few weeks ago, and, therefore, I see no reason why Mr. Guité can't answer the question.

Mr. Pat Martin: There's nothing to do with a minister there, is there?
> * (1655) 
Mr. Charles Guité: I decline.

The Chair: Does he have the right to decline, Mr. Walsh?

Mr. Pat Martin: This is not helpful at all.

Mr. Rob Walsh: I would ask on what basis Mr. Guité has declined to answer the question.

Mr. Pat Martin: He doesn't want to. He doesn't feel like it.

Mr. Charles Guité: It has nothing to do with the three contracts that we're reviewing here today.

Mr. Pat Martin: It has to do with the relationship, a possible relationship, between Groupaction, the very contractor, and you, a civil servant. It would be improper to benefit in any way, shape or form, even if that's just the convenience of having somebody take an expensive car off your hands. It would indicate to me far too cozy a relationship. I want to know if this is true.

Mr. Charles Guité: No comments.

The Chair: I don't think that you can say > "> no comment> "> , Mr. Guité. It's a legitimate question by a member of Parliament in the administration of public funds. I mentioned that Mr. Boudria, a former Minister of Public Works, had a financial involvement with one of the contractors of public works a few weeks ago. It became public knowledge and everybody knows the outcome of that. If Mr. Martin feels there's something of a similar vein here, I think you have an obligation to answer the question: yes, you had, or, no, you didn't. > 

Mr. Pat Martin: Who did you sell your car to? That's all we need to know. It's a straightforward question, really.

The Chair: Mr. Guité, your answer.

Mr. Charles Guité: The answer is, yes.

Mr. Pat Martin: You--

Mr. Charles Guité: I sold him it.

Mr. Pat Martin: --sold your car to--

Mr. Charles Guité: Yes.

Mr. Pat Martin: To the actual company or to an individual--

Mr. Charles Guité: To an individual.

Mr. Pat Martin: To a director of the company?

Mr. Charles Guité: That's correct.

Mr. Pat Martin: Mr. Brault?

Mr. Charles Guité: Yes.

The Chair: Okay, Mr. Martin, your time is up.

Now, we are going to move to Mr. MacKay.

Mr. Peter MacKay: Thank you, Mr. Chair, Mr. Guité, counsel, all the witnesses for being here again.

I want to turn it back to the actual Auditor General's report, of which I'm sure you've read in meticulous detail. There are some fairly scathing comments that reflect directly on the performance of your job. You would agree with that?

Mr. Charles Guité: No, I don't agree.

Mr. Peter MacKay: No? I'm quoting the view of the Auditor General's directly from the report at page 7, paragraph 33:

In our view, the public servants involved in the administration of the three contracts did not discharge their responsibilities with due care and diligence. Officials provided payments for work that varied considerably from the work stipulated in the contracts. 

It states in other paragraphs, specifically paragraph 29:

A retired executive director of CCSB informed us that a significant part of the total amount of the contractor received under the first two contracts had paid for not only reports, but also verbal advice, discussion and strategic information. 

You've confirmed that. That did take place.

Mr. Charles Guité: That's correct.

Mr. Peter MacKay: So there was hundreds of thousands of dollars paid for advice that you received orally. There's no written confirmation. Is that correct?

Mr. Charles Guité: That's correct.

Mr. Peter MacKay: And it goes on to say that > "> ...no notes or copies of any correspondence in the files or the type or extent of information or advice received> "> . So there was no documentation whatsoever to verify this information was in fact received. Correct?

Mr. Charles Guité: That is correct.

Mr. Peter MacKay: In fact, for the most part, the file were poorly documented. The executive director of the CCSB told us that this was how business was done while he was responsible for the program. 

That's you that she's talking about. Correct?
* (1700) 
 Mr. Charles Guité: That's right.

Mr. Peter MacKay: And that was all done, business was done that way, because you feel it was all justified because you were at war.

Mr. Charles Guité: That's correct.

Mr. Peter MacKay: So, therefore, there's a bunker mentality that you bunker down and you don't tell people what you're doing when you're at war. You feel you were justified in doing that.

Mr. Charles Guité: Yes, I was justified. And I got good value and I got good results.

Mr. Peter MacKay: And you would do it again, you've told us.

Mr. Charles Guité: If I had to do it again under the same circumstances, yes.

Mr. Peter MacKay: So what happens to the obligation that you as a public servant have, sir, to the public--not to your political masters, not even to the Financial Services Act--to account to the public that money was spent for value? Just your word, is that what you're telling us, that we should just take you at your word?

Mr. Charles Guité: No, no, no. Look at the results.

Mr. Peter MacKay: Look at the results.

Mr. Charles Guité: Look at the results.

Mr. Peter MacKay: You're attributing your work and the handing out of contracts for hundreds of thousands of dollars for advertising to saving the country, that's what you're telling us?> 

Mr. Charles Guité: You want to believe it. You want to believe it.

Mr. Peter MacKay: Yes? You really believe that?

Mr. Charles Guité: Yes, I do. And why did the Government of Quebec create the equivalent of Communications Canada called Communications Québec? Why is the Quebec government putting money into sponsorship? Because we killed them, that's why.

Mr. Peter MacKay: I see. So it was done, it was a war that you were in, and we should just take your word for it that what you did was justified?

Mr. Charles Guité: Look at the results.

Mr. Peter MacKay: Look at the results. This sounds very familiar. This is what the Prime Minister says: the end justifies the means.

Mr. Charles Guité: The Prime Minister can say what he wants.

Mr. Peter MacKay: Okay. And you're telling us that your duty to the public, your duty to be open and honest and transparent about what that information was, is you're justified in not telling us that because it would somehow jeopardize or it would now undo the work that was done?

Mr. Charles Guité: No, no. I feel very, very good about what I did and I think the Government of Canada got value for their money and they got results.

Mr. Peter MacKay: Tell me this, what was that information? What was that information that you received that was so valuable it saved the country?

Mr. Charles Guité: Who was going to be there, what type of crowds were going to attend, was the Government of Quebec going to be present, who were the other sponsors who were at the event. It could be anybody from Hydro Québec to any other, Casino and so forth, quasi-government organizations in Quebec. It was very important for me to know who's going to be at those events.

Mr. Peter MacKay: Why couldn't that have been written down?

Mr. Charles Guité: Because I decided not to write it down so it wouldn't be accessible.

Mr. Peter MacKay: Wouldn't be accessible to whom?

Mr. Charles Guité: Somebody asking for it through Access to Information.

Mr. Peter MacKay: You heard Mr. Bryden refer--

Mr. Charles Guité: Yes, I did, and I said to you--

Mr. Peter MacKay: --to the fact that information would be protected?

Mr. Charles Guité: And I said to Mr. Bryden 20:20 is hindsight.

Mr. Peter MacKay: So you would do it differently now.

Mr. Charles Guité: Definitely.

Mr. Peter MacKay: Because you're now being called to account for what you did.

Mr. Charles Guité: No, no. There was nothing done illegal. What I've done, I've done it very well--

Mr. Peter MacKay: Well, that remains to be seen. You've told us that what you did you feel you were justified in doing--

Mr. Charles Guité: Yes.

Mr. Peter MacKay: --and that you would do it again.

Mr. Charles Guité: Yes.

Mr. Peter MacKay: So the explanation for the reasons as to those contracts being set out, who was receiving them, the additional increased payments that you authorized, all of that was done on oral advice. There's no documentation of that. You feel that you don't have to report that to the public or you don't have to report that even to the Auditor General.

Mr. Charles Guité: No. There were contracts there, there was work performed and there were invoices paid.

Mr. Peter MacKay: But there was no documentation. I'm quoting directly, > "> The government's file...> "> --

Mr. Charles Guité: I know and--

Mr. Peter MacKay: Just listen to me for a minute, sir. Paragraph 28:

The government's files were so poorly documented that many key questions remain unanswered surrounding the selection of the contractor and the basis for establishing the price and scope of the work of the contracts. 

Those are the words of the Auditor General, who is an officer of Parliament and has to report to the public. She can't provide this information to the Parliament of Canada because you didn't document anything.> 

Mr. Charles Guité: That is correct.

Mr. Peter MacKay: And you feel that's okay.

Mr. Charles Guité: Yes.

Mr. Peter MacKay: Well, I'm suggesting to you that it's not okay, sir. I'm suggesting that something is clearly wrong and yet you don't seem to have any bout of conscience, you don't seem to have any ability to justify it.

The Chair: Mr. MacKay.

Mr. Peter MacKay: Okay.

So let me ask you about the increased payments. There is an indication in some of the files that there was a 12% fee that was a top-up. That was given to contractors. Are you aware of that?

Mr. Charles Guité: Definitely.

Mr. Peter MacKay: And what was that for exactly?

Mr. Charles Guité: The fee, the 12% commission, is based on industry standards, which is normally 15% on advertising communication. In this case 3% went to the agency of record who paid the invoiced and ensured the post mortem and the work was properly done, and the 12% is the commission that went to the agency assigned to those events.

Mr. Peter MacKay: But how do we know the work was properly done, back to my original question?

Mr. Charles Guité: Because I'm satisfied at the end of the day that visibility was there, and it was confirmed by the agencies that the visibility was there, and I paid their 12% commission.
* (1705) 
Mr. Peter MacKay: You, and you, alone?

Mr. Charles Guité: Myself, and some of my staff.

Mr. Peter MacKay: Okay, how many other staff did you have?

Mr. Charles Guité: Oh, 1995-1997, I had about 14 people on staff; 1997, until I left, probably 250.

Mr. Peter MacKay: Two hundred and fifty staff. Who worked directly in the office with you that would receive these reports?

Mr. Charles Guité: I would have to go back to the files and get those. The staff has changed over the years; there were several people.

Mr. Peter MacKay: I was told that there was two people who worked in the office. Is that correct? There were two direct staff people who worked in your office?

Mr. Charles Guité: No.

Mr. Peter MacKay: That's not correct?

Mr. Charles Guité: No.

Mr. Peter MacKay: Was there additional staff that came and went during your period?

Mr. Charles Guité: If I go back, 1995-1997, we were about eight.

Mr. Peter MacKay: When you came into this position, you told us--well, when did you first start in this particular role?

Mr. Charles Guité: In 1985-86.

Mr. Peter MacKay: And during the course of that time, or prior to, you were made aware of your obligations under the Financial Administration Act, the Treasury Board guidelines, the Department of Public Works guidelines?

Mr. Charles Guité: Definitely.

The Chair: Mr. MacKay.

That completes round one. We're now moving on to round two, and that's a four-minute round. 

We'll start with Ms. Meredith, please.

Ms. Val Meredith (South Surrey-White Rock-Langley, Canadian Alliance): Thank you, Mr. Chair.

I want to follow up on something that was said earlier. You mentioned that you met on a regular basis with the minister, and the deputy minister. When you said regular basis, what did you mean by that?

Mr. Charles Guité: Sometimes, once a week. Sometimes, twice a week. Sometimes, three times a week.

Ms. Val Meredith: So, very regularly, then?

Mr. Charles Guité: Yes.

Ms. Val Meredith: I want to go to the first contract that you had. You doubled it, from $250,000 to $500,000. Under page 4 of that contract, it says that the limitation of expenditure, Her Majesty's liability to the contractor under this contract shall not exceed $250,000, plus goods and services tax, unless otherwise authorized in writing by the minister.

Did you get that authorization?

Mr. Charles Guité: I would assume that my delegation allowed me to do that.> 

Ms. Val Meredith: According to this contract, only the minister has the ability to change the amount, unless otherwise authorized in writing by the minister. It doesn't say by the deputy minister, it doesn't say anybody else.

Mr. Charles Guité: I'm not a contracting officer, so I couldn't answer that question.

Ms. Val Meredith: Excuse me. I want to follow up on this.

This is part of the contract that you signed on September 18, 1996. This is part of a contract that you signed. I'm sorry, that was when you changed that contract. You signed the contract on July 2, 1996.

Mr. Charles Guité: Yes, it would be the amendment.

Ms. Val Meredith: The amendment, which you did, you said you did on your own, the contract that you signed says that only the minister, in writing, not verbally, but, in writing, the minister has to agree to any change in that.

Did you get, in writing, by the minister, authorization for you to change the amount?

Mr. Charles Guité: No, not that I can recall.

Ms. Val Meredith: So, under what authority did you change the amount?

Mr. Charles Guité: My delegation authority that I had from the deputy, I would assume, and if the contract went through the system I would assume it was appropriate.

Ms. Val Meredith: So, you feel that you had the authority to change the amount, to double the amount, you felt that you had the authority to pick which contract, or which agency, would get it. 

You mentioned that there were five agencies that were picked out of the ten. You interviewed ten, you picked five. Were those five wired contracts?

Mr. Charles Guité: Were they what?

Ms. Val Meredith: Were they agency wired contracts?

Mr. Charles Guité: I don't understand the question.

Ms. Val Meredith: A wired contract is where there are special mandatory provisions within the contract, so that you're compelled to select a certain agency. 

Were these contracts wired contracts that compelled you to hire the agencies that you did?

Mr. Charles Guité: It's still not very clear what you're trying--I don't understand your--

Ms. Val Meredith: Okay. How did you select the five?

Mr. Charles Guité: We interviewed, and, again, I would have to go back to the file. But, if I remember right in my discussion in 1995, with FPRO, and it could be 12, it could be 10, it could be 11, it could be 13--

Ms. Val Meredith: How did you select the five?

Mr. Charles Guité: Based on a scope of work that we gave to those agencies, and we said, give us your proposal on how you would address these issues. Obviously, these issues were related to the referendum coming up in Quebec. Based on those submissions submitted by those agencies, we evaluated the submission, and selected what we felt were the five best agencies.
 * (1710) 
Ms. Val Meredith: So, you weren't told by the minister's office in your weekly, bi-weekly meetings what expectations these contracts were to have, and that these agencies were the only ones that fulfilled those expectations. 

Mr. Charles Guité: The decision of who was hired was made by myself, and my staff, and some people at FPRO.

The Chair: Ms. Meredith, that's right on the button for four minutes.

I've been focusing on some other things. 

We're going to go to Mr. Desrochers, then we'll go to Mr. Shepherd. Four minutes.

Mr. Odina Desrochers: Thank you, Mr. Chairman.
Mr. Guité, when you say you retained five firms, who was responsible initially for selecting the 11 or 12 firms in the running?

Mr. Charles Guité: That was selected by myself, some of my staff, and some of the staff at FPRO.

Mr. Odina Desrochers: Were these firms invited to make submissions or was the process open to public tender?

Mr. Charles Guité: No. It was not a public tender process because we did not want to broadcast what we were doing. So we selected 10 or 12 firms, based on my knowledge, knowledge of FPRO people at the time, and some of my > staff, and we invited those 10 or 12 firms.

Mr. Odina Desrochers: Because a referendum was in the offing. However, once the referendum was over, what justification did you have for continuing to award contracts with the five firms that had initially been selected under special circumstances?

Mr. Charles Guité: Because of the results we've got from those firms during the referendum.

Mr. Odina Desrochers: Political results, financial results or results of visibility?

Mr. Charles Guité: No. Results of visibility, and effectiveness of communication.

Mr. Odina Desrochers: When you say that you had the authority to adjust the value of the first contract, to double the amounts, were you following existing directives? I would imagine that directives are in place governing the contracting process. Based on which directives did you make this decision?

Mr. Charles Guité: Again, I'd have to go back to the contract regulations, and I could be wrong here.

If I recall, you can amend a contract up to, and including, the initial amount, but you can't go over the amount. In other words, if a contract is issued for $250,000, you can amend up to $250,000, but you can't amend, let's say, to $300,000.

Mr. Odina Desrochers: Therefore, you decided to double the value of the contract all on your own. Is that what you> '> re saying?

Mr. Charles Guité: As I stated before, it was my decision based on discussions I had with Groupaction, to double the value of the contract.

Mr. Odina Desrochers: Without wanting to stray from the subject at hand, was Groupaction the only firm to have its contract amended in this fashion?

Mr. Charles Guité: I can't recall. I would have to go back to the files, and check the other files.

Mr. Odina Desrochers: Excuse me, but the value of a signed contract was doubled, under very exceptional circumstances. You have no recollection of any other similar cases?

Mr. Charles Guité: I used to sign, I don't know how many contracts a day, or a week, or a month, but several. So, to recall that I doubled other contracts, or amended other contracts, I'd have to go back to the files and check it. 

I think I'd be very clear that there is no question, I probably amended other contracts upwards during that period of time with other firms.

Mr. Odina Desrochers: Your department prepared an internal audit report, or so we> '> ve been told. In the case of Groupaction, contract values were adjusted upward. Did you receive additional instructions as to how you should proceed?

Mr. Charles Guité: I> '> m not clear on the question.
Mr. Odina Desrochers: Given that there is an internal audit report that has been widely consulted, you> '> re telling us that you had the authority to adjust Groupaction contracts and that you in fact doubled the value of the contracts. I asked if you have had occasion to adjust the contracts of any of the other firms, and you seem to be inferring that you in fact have done so. Following the report> '> s publication, given that you continued to enjoy considerable latitude and that we> '> re still looking for the supporting documentation, did you receive further instructions regarding your decision-making authority? 

Mr. Charles Guité: No, I don't think so. When was that report done? The report you're talking about is what report?

Mr. Odina Desrochers: Look, I don> '> t want to start an argument, but we discussed this report at considerable length this morning and the media has been talking about it as well. I> '> m referring to the internal audit report on the sponsorships awarded. Apparently, there were as many oversights on the department> '> s part as there were deficiencies identified within the firms. Haven> '> t you seen the report? Haven> '> t you heard about it?

Mr. Charles Guité: No. That audit was done after I left the government.> 

The Chair: Thank you, Mr. Desrochers.

Mr. Shepherd, please. Four minutes.

Mr. Alex Shepherd (Durham, Lib.): Mr. Guité, this contrived absence of documentation, is that process also carried out with Groupaction? In other words, did they similarly not maintain records?
 * (1715) 
Mr. Charles Guité: Who? The agency?

Mr. Alex Shepherd: Correct.

Mr. Charles Guité: I can't comment on the agencies.

Mr. Alex Shepherd: The monies that were expended, you're saying, on these three contracts, we got value for our money, somehow? Was all that money spent in sponsorships?

Mr. Charles Guité: No. In fact, the money came from the sponsorship budget. But those actual reports are not sponsorships. Those reports are reports that provided advice, and a list of events that would take place, and, again, who would be there, and so forth. But those are not actual sponsorship, like the Molson Indy, in Toronto, or the Grand Prix in Montréal.

Mr. Alex Shepherd: So, when you used to advice, a sort of general description, did you pay people to do certain things? Did you contract people to perform certain things that were outside of the sponsorship program?

Mr. Charles Guité: No. What I paid them for was to produce a report, and to provide strategic advice, that I repeat, was done verbally. It was very important for me to know, for example, that Le Grand Prix de Trois-Rivières, the casino from Québec and Montréal is going to be there, and the government of Québec is going to be there, and so forth. Groupaction had several people working on those events because, as you know, how many events did we sponsor in la belle province.

Mr. Alex Shepherd: You're trying to convince us that to stay in Canada the only thing you have to do is to make sure that the government of Canada has displayed a local sporting function. 

Mr. Charles Guité: That's not what I'm trying to convince you, sir.

What I'm saying to you is that the little bit that we did, and we being, my organization--

Mr. Alex Shepherd: Is any of it illegal?

Mr. Charles Guité: No. Why would it be illegal?

Mr. Alex Shepherd: I don't know. We have no knowledge of what you spent the money on, so now that we ask the question if it was illegal--

Mr. Charles Guité: No. If we did a sponsorship event with the Molson Indy in Montreal, or Le Festival de la tarte au sucre or les Cantons de l'Est or whatever, we paid those event organizations a certain amount of money to have certain visibility, which was negotiated by the agencies.

Mr. Alex Shepherd: But why were you ashamed of it? Why couldn't you write down the list of people who were going to show up?

Mr. Charles Guité: Why wouldn't I do it?

Mr. Alex Shepherd: Why wouldn't you write a list of it? Why is it so important that this be contrived, that those files are absent from all this information? What is so politically sensitive about knowing who is going to show up at the local casino--

Mr. Charles Guité: Not who as individuals attending the event, but who is going to be there sponsoring it, is very important. 

Mr. Alex Shepherd: But this must be public knowledge, in any case.

Mr. Charles Guité: Not necessarily.

Mr. Alex Shepherd: Why did you leave the government in September 1, 1999?

Mr. Charles Guité: Because I turned 55 years of age, and if I stayed in the government I would have got 30% of my salary to keep doing what I was doing. After 34 years, and a bit, I decided it was time to go.

Mr. Alex Shepherd: It was described to us that you seemed to be there one day, and gone the next.

Mr. Charles Guité: No. In fact, I was going to leave on April 1, 1999, which was my birthday month, and the deputy minister asked me if I would stay on for four or five months longer because of the replacement that was replacing me, Mr. Tremblay, had arrived in February, and did not have a chance, obviously, to do a transition. So I agreed to delay my retirement until the end of August.> 

Mr. Alex Shepherd: You said you touched these three reports, even though they can no longer be found, two of them, at least.

Mr. Charles Guité: No. I have seen the three reports, and I've touched the three reports. 

Mr. Alex Shepherd: Why are they missing now?

Mr. Charles Guité: Ask the current administration.

Mr. Alex Shepherd: Do you have any knowledge in shredding?

Mr. Charles Guité: They were there when I was there.

The Chair: Thank you, Mr. Shepherd.

Mr. Murphy. Four minutes, please.

Mr. Shawn Murphy (Hillsborough, Lib.): Thank you, Mr. Chairman.

Mr. Guité, do I take it it's your belief that in the three Groupaction contracts that all provisions of the Financial Administration Act were followed?
* (1720) 

Mr. Charles Guité: Yes.

Mr. Shawn Murphy: And it's your belief also that all provisions of government contract regulations were followed?

Mr. Charles Guité: Yes.

Mr. Shawn Murphy: Now, you say you were at war, but we're dealing with public money and we have to account for this public money. One thing I wanted to get absolutely clear here, the Auditor General has identified a fairly substantial mess that we have to try and get to the bottom of. The first question that I'd like to get answered, I guess, is who's responsible.

Now, Mr. Quail has testified before this committee and he has given evidence that he trusted the people that run this agency, that he wasn't supervising it and he thought that everything was being done. One would expect to see the checks and balances and the processes that are called for in normal government operations but that aren't present in this case. It seemed to be a rogue agency reporting to no one. But my question to you, sir, is that this mess--and perhaps you don't agree that it is a mess--you're responsible.

Mr. Charles Guité: Yes.

Mr. Shawn Murphy: There's no one else that you're pointing the figure at.

Mr. Charles Guité: No.

Mr. Shawn Murphy: If there is a mess in this report, it's the sole responsibility of Mr. Charles Guité.

Mr. Charles Guité: That's correct.

Mr. Shawn Murphy: Thank you.

I want to follow up on this issue of a missing contract. I'll just follow up what Mr. Shepherd has indicated.

If we have a situation where a report was done, an invoice for $550,000 was rendered, the invoice was paid, now, normal commerce would indicate that report should be in the hands of the government. Normal commerce would indicate that report should be in the hands of Groupaction. That report is not present. Nobody can find that report. Somebody has given us a copy of a previous report, but...we have to make an assessment of your credibility. We're getting to a point that's getting almost ridiculous to say that Groupaction doesn't have the report, the government doesn't have the report. Can you elaborate any?

Mr. Charles Guité: I'll restate what I've said earlier. I have seen the three reports. Other people on my staff when I was there have seen it. People have put it on file. Shortly after I left, somebody apparently referred to the second report. Today, it's gone. I can't comment what happened after I left.

Mr. Shawn Murphy: But Groupaction would have a copy of the report.

Mr. Charles Guité: I don't manage Groupaction.

Mr. Shawn Murphy: Have you ever worked for Groupaction?

Mr. Charles Guité: Pardon?

Mr. Shawn Murphy: Have you ever worked for Groupaction?

Mr. Charles Guité: No.

Mr. Shawn Murphy: Have you ever contacted Groupaction to ask them if they have a copy of this report?

Mr. Charles Guité: No, because I was gone when all this issue started. Why would I call Groupaction?

Mr. Shawn Murphy: But this is an extremely strange scenario that we're dealing with that no one has a copy of this report. You agree with that?> 

Mr. Charles Guité: Sure, I agree with it.

Mr. Shawn Murphy: And you have no explanation?

Mr. Charles Guité: No, no. They were there when I was there and today they're not there. If Groupaction doesn't have a copy, I can't manage the agencies and the firms. That's their problem, not mine.

Mr. Shawn Murphy: Nothing further.

The Chair: Thank you, Mr. Murphy.

Mr. Ritz, please, four minutes.

Mr. Gerry Ritz (Battlefords-Lloydminster, Canadian Alliance): Thank you, Mr. Chairman.

Mr. Guité, you claim you are at war. Were you a captain in the trenches or were you the general?

Mr. Charles Guité: All of the above.

Mr. Gerry Ritz: Okay, a one-hit wonder.

I would also say that this is more about damage control than being at war. It was an embarrassment to the Prime Minister, that whole referendum.

Some hon. members: Oh, oh.

The Chair: Order, order.

Mr. Gerry Ritz: The Sponsorship Program was the brainchild of the Prime Minister. It was his public policy. It was his idea in 1995.

Mr. Charles Guité: I can't recall.

Mr. Gerry Ritz: There had to be money allocated for it. It had to come from somewhere. It's a done deal. Okay? Did you have a mandate for that Sponsorship Program or did you just make it up as you went along?

Mr. Charles Guité: No, no.

A voice: One second.

A voice: Okay, now repeat the question.

Mr. Gerry Ritz: Okay. Was there a mandate for the Sponsorship Program when it became public policy or did you make it up as you go along?

Mr. Charles Guité: What do you mean by > "> a mandate> "> ?

Mr. Gerry Ritz: Well, did you have a direction? You had a budget of money, there was money allocated for it. Was there a game plan? You talked with the minister once, twice, three times a week--

Mr. Charles Guité: No, no, that meeting--

Mr. Gerry Ritz: --you worked on a cabinet communications committee. Was there a mandate, checks and balances, are we winning or are we losing? Overall, would you say you won?

Mr. Charles Guité: Let me try to give you un aperçu of how this came about.

Obviously, after the referendum, and obviously, the results, and, again, I would have to refer to the files to make sure these numbers are accurate, but, if I remember right, the first amount of the sponsorship program when it started, after the referendum, was around $15 million, if I recall the numbers right. Subsequent to that, after looking, and then, with that $15 million we started to pick certain events that we would do. Obviously, depending on the size of the events, and the number, you don't go too far with $15 million, even though $15 million is a lot of money. 

If I recall, in 1996, I prepared a Treasury Board submission to increase the amount to $30 million a year for sponsorship. Again, you would have to check the figures. There are documents there that would show the Treasury Board submission, I am sure. Then, there was another submission prepared, I would say, 1997, 1996-97, that increased the budget to $40 million a year. If I recalled what I've read in the press, mind you, I don't believe the press too much, but, I think that number is still valid today, that it's around $40 million, the sponsorship program. 
* (1725) 
Mr. Gerry Ritz: Also, part of the sponsorship program, there was a position created of a liaison between the CCSB, and higher up. Who was that person?

Mr. Charles Guité: Myself.

Mr. Gerry Ritz: You were the liaison? You, and you, alone? So you reported directly to the minister, to the PMO, to the communications cabinet committee?

Mr. Charles Guité: No. No. I reported to Mr. Quail on an organization chart that still exists, I'm sure, today. At the level I was in the department, like any other assistant deputy minister, I had contacts regularly with the minister's office.> 

Mr. Gerry Ritz: Alright. Mr. Tremblay was your replacement, and you spent five months training him, April, through until September 1. Did Mr. Tremblay ever express doubts about signing off on the third Groupaction contract? The checklist was done and was approved in June, and--

Mr. Charles Guité: I was not there when that was signed.

Mr. Gerry Ritz: But the checklist was done in June.

Mr. Charles Guité: I was not there when the invoice was paid, and I was not involved in a final payment--

Mr. Gerry Ritz: Did he ever express doubts to you, before September 1, that he had a concern with paying that contract?

Mr. Charles Guité: No, never.

The Chair: Thank you, Mr. Ritz.

Mr. Harb, for four minutes.

Mr. Mac Harb: Thank you, Mr. Guité. I appreciate your appearing before the committee. I know how difficult it is for you to be subjected to a barrage of questions, some of which may be out of line. 

Mr. Charles Guité: Not necessarily, no.

Mr. Mac Harb: I wanted to ask you to give us a little bit of a background, in 1995, during the referendum. Was the budget to your department cut at that time? Did you suffer the same sort of thing other departments have suffered?

Mr. Charles Guité: Yes.

Mr. Mac Harb: Did the Separatists benefit as a result of the budget cut--

Mr. Charles Guité: Did the--

Mr. Mac Harb: Did the Separatists in Quebec, did they suffer as a result of that, or did they benefit as a result of that cut?

Mr. Charles Guité: I don't understand your question.

The Chair: I think that question is out of order.

Mr. Mac Harb: Is it? Why? I'm leading. Can you give us some details, and some of the background information about the sort of thing that the Parti Quebecois will do in Québec that have sort of intrigued you, and gave you an idea, or gave you a venue to accelerate your sponsorship, and your involvement. Can you give us some background.

The Chair: We have a point of order, here.

Ms. Meredith.

Ms. Val Meredith: It's not on the three reports.

Mr. Mac Harb: It is, Mr. Chair. It is. I advice that we were getting.

Mr. Ghislain Lebel: (Inaudible) not separatists elsewhere.

The Chair: I think that Mr. Harb's question was acceptable.

Go ahead, Mr. Harb.

Mr. Mac Harb: Thank you. Sometimes, you are very reasonable. Thank you.

Mr. Guité, I would like it for the record. I know this is going to, at some point in time, be made public. I think it's important for the record to speak about the circumstances under which you were operating at that time, in particular, in Quebec, because some of my colleagues are saying that why are we not spending money elsewhere in the country, why did we spend most of the money in Quebec.

Mr. Charles Guité: I don't know how to answer that question because I don't think the question is very clear. But I'll give you what I think you're looking for. 

During the referendum, for example--and I guess it's in camera so it'll come out in three year, but that' fine--I, personally, with the funding we had through FPRO and the Government of Canada to fight the referendum, bought every billboard in Quebec and every outdoor advertising that was available. Okay? I blanketed...I phoned the guys in Montreal, the media people, and I said, > "> What's your inventory?> "> They said, > "> Oh, it's about $8-million worth of outdoor advertising that's available> "> . I said, > "> I'll buy it> "> . And the guy at the other end of the phone said, > "> Pardon me?> "> . I said, > "> I'll buy it> "> . That was a strategy that we then...I think the program at the time was Attractions Canada and there was something else with health. So we plastered the Province of Quebec with government ads that were legitimate government programs.

What was the strategy? The media was not available to anybody else but us. We had it blocked. Okay? Why did we do that? So that the separate movement in Quebec, or the Parti qu> ébécois, whatever, wouldn't have access to it.

I subsequently bought all the transit during the referendum. Not a bad strategy. I now... not I, but the Government of Canada, through my doings, have controlled the availability of the media available.

Was that wrong? I don't think so. I think it was the right move. I know the Auditor General is sitting on my right. It says sole-sourcing. The nature of the work is such that it would not be in the public interest to solicit bids.
* (1730) 
The Chair: Is that your comment or the Auditor Generals?

Mr. Charles Guité: No, no, that's the directive the Auditor General has put in her report. And she's absolutely right, that's one of the conditions of sole-sourcing. Now, I may have looked at that at the time and decided there's a clause I can use. It's maybe bending the rules a bit, but it worked.

The Chair: Thank you, Mr. Harb.

Mr. Proulx, please, four minutes, s'il vous plaît.

Mr. Marcel Proulx (Hull-Aylmer, Lib.): Thank you, Mr. Chairman.

Good day, Mr. Guité. You stated that you controlled virtually all decisions and all information within your office. At the time, how many person did you have on your staff, not Public Works employees per so, but staff in your office who handled sponsorships and contracts?
Mr. Charles Guité: What period of time are you referring to, Mr. Proulx?
Mr. Marcel Proulx: Well, the first of the Groupaction contracts was awarded after the 1995 referendum.
Mr. Charles Guité: At the time, I had six staff members working on sponsorships.
Mr. Marcel Proulx: On sponsorships?
Mr. Charles Guité: And on advertising as well.

Mr. Marcel Proulx: I see. When I> '> m trying to get at is this: you kept the information or the advice you received verbally to yourself, because as I understood it - and you can correct me if I> '> m wrong - not only was there no documentation in the files, as per your wishes, you did not share the advice you received either with other colleagues or with your staff. Correct?

Mr. Charles Guité: That> '> s not so. I shared information with a number of persons within the organization.

Mr. Marcel Proulx: I see. And what about decisions?

Mr. Charles Guité: Moreover, I could give you names, because two of these persons are still working there, while the two others are not, but I know for a fact that they were involved in the process. When I received information, of course I shared it with my team.

Mr. Marcel Proulx: I see. So then, you shared the information and decisions were made together?

Mr. Charles Guité: Yes, I did share the information that I got and the advice that I got.

Mr. Marcel Proulx: Okay. And the decisions were made in a think tank?

Mr. Charles Guité: Yes, quite often I would sit down with some of my key people and we'd look at them and say, > "> Look, it might be better to be present there because of that region of Quebec> "> . It was better to be présent au Lac Saint-Jean than in central Montreal.

Mr. Marcel Proulx: Yes, as a matter of fact, I think you probably thought it was better to be elsewhere than the Outaouais, but I didn't appreciate that at the time.

Anyway, Mr. Guité, when invoices came in, was it you and the same people who have made the decisions--

Mr. Charles Guité: When...excuse me?

Mr. Marcel Proulx: When invoices came in for the different sponsorships or the invoices from the agencies, was that examined and paid by the same people who had examined the suggestions?

Mr. Charles Guité: No, no. Normally, when I got an invoice on my desk for signature, they had the proper stamp on it and the work had been done. I was aware of most of those events, so I never, never questioned an invoice. By the time it had got to me, I knew it had gone through my administration, the people who were involved in the projects, who were responsible for the projects, and I signed the invoice.> 

Once that invoice was signed, it went to the financial section of the department. They, again, have a process that says there is a contract in place, the value is not overspent, dada, dada, and they authorize payment to the agency. So there is a system in public works that does that.

Mr. Marcel Proulx: Therefore, you were confident that whatever decisions or whatever contracts you gave out, because it went through the meat grinder of your department, when it came back for payment, because it came back for payment, it had to be all right.

Mr. Charles Guité: The department could not pay an invoice without a contract. So if the invoice came in and there was no contract, you can't pay the invoice. Therefore, when I issued a contract, it went through the contract branch of our department. When I signed an invoice, it went through the financial branch and they matched the two. There's a contract, there's an invoice, it's authorized for payment, therefore, we issued a cheque.
* (1735) 
Mr. Marcel Proulx: Okay, thank you.

We haven't much time, otherwise I'd ask you for some of the dirty tricks the Quebec government played on you. But we haven't enough time.

Thank you, Mr. Chair.

The Chair: Exactly four minutes, Mr. Proulx, so, no, you're out of time.

Mr. Marcel Proulx: I'm well aware.

The Chair: Mr. Guité, my first question to you is: at the beginning you claimed you could not answer any questions pertaining to discussions with the minister. Did you ask your minister for a release to allow you to divulge these conversations with us?

Mr. Charles Guité: No, I have not.

The Chair: You didn't ask him for a release. Okay.

Now, you were, using your terminology, > "> at war> "> , therefore, that allowed you to bend the rules--and I think Boisey's quotes are your quotes. You talked about under the Sponsorship Program there was a great amount of strategic advice that was given to you verbally. The strategic advice that was given to you had nothing to do with the Sponsorship Program. Am I correct?

Mr. Charles Guité: It had...?

The Chair: Nothing to do with the Sponsorship Program.

Mr. Charles Guité: Oh, definitely, it was directly related to the Sponsorship Program.

The Chair: What kind of strategic advice could you get? You did say that you bought up all the outdoor advertising and all the transit advertising.

Mr. Charles Guité: That example had nothing to do with the Sponsorship Program.

The Chair: So what kind of strategic advice were you getting?

Mr. Charles Guité: I'll repeat what I said earlier for the same question. I was getting the advice of what other organization was sponsoring that event; in other words, if the Government of Canada is going to be there at, let's say, $400,000 worth of sponsorship at Formula One in Montreal, what amount of money is the Quebec Government putting in, what amount of money is the Casino putting in, what amount of money is Hydro Quebec putting in, what amount of money is Molson putting in, what amount of money is Air Canada putting in. Based on the amount of money is the amount of visibility you can buy at those events. So if I arrived at the Formula One in Montreal and I said to the organizer of the event, > "> Look, I'll take a sponsorship for $100,000> "> , he may say, > "> Okay, you can have two word marks on the track and a bunch of flags in the stands, but if you give me $500,000, you can have a lot of word marks on the track and you can have them at very specific places where the TV camera will be monitoring the race> "> , and that's what you pay for.

The Chair: Yes, but surely if you were still using the terminology > "> at war> "> and you wanted to say > "> I want to be the most visible advertiser at a particular event> "> , this is not classified stuff, this isn't stuff that is going to save the country. Why is it all verbal and not written? It also seems to me this is hardly verbal information worth hundreds of thousands of dollars. Why would i> t be worth hundreds of thousands of dollars and why couldn't something like that be written down?

Mr. Charles Guité: Because of the hours the agency spent looking at those events and advising me on all the events in Quebec and going out and finding out from the events organizers who's going to be there. In many cases, we were turned down. In certain sponsorships that we've approached, organizers of events, we were bluntly told, > "> Monsieur Gouvernement du Canada, you can keep your money, we don't want you here> "> .

The Chair: Well, your credibility is getting a little thin with me on these answers.

Let me ask you this question: did Groupaction or any of these other contracts that you had do any polling for you, as far as the separatist issue was concerned?

Mr. Charles Guité: No.

The Chair: There was no polling involved? It was strictly > "> and nothing but> "> advertising?

Mr. Charles Guité: Yes.

The Chair: Nothing else?

Mr. Charles Guité: No.

The Chair: And yet it had to be so secret that it had to be verbal.

Mr. Charles Guité: No, because we didn't want the information to get out.

The Chair: But my goodness, the government has tonnes of information they sit on, and, as Mr. Bryden, the access to Information hides a whole bunch more, and everything dealing with cabinet, and you're claiming cabinet confidentiality, in essence, because you're advising the minister. Everybody knows that's covered by confidentiality. Your credibility, I'm sorry to say, is getting a little bit thin.

Let me get back to this $8 million in advertising, where you said, > "> I just bought all the outdoor advertising in Quebec> "> .

Mr. Charles Guité: This--

The Chair: Let me ask you this question: did you tell the minister you had done this so that he could say, > "> Good job, Mr. Guité, you've frozen out the separatists> "> ?

Mr. Charles Guité: No.

The Chair: Did you advise the minister at all?

Mr. Charles Guité: No.

The Chair: Did you tell anybody in the cabinet at all?

Mr. Charles Guité: No.

The Chair: Was this a one-man crusade to save the country?

Mr. Charles Guité: No, no. No, no. The example you're referring to that I used, that was during the referendum when I was working with the Federal-Provincial Relations Office, my organization and the Privy Council Office on a strategy. It had nothing to do with the Sponsorship Program. That's an example I used based on his question earlier of, > "> What type of strategy were you using?> "> .
* (1740) 
The Chair: How was this strategy paid for? Was it paid through these contracts?

Mr. Charles Guité: Which one, now?

The Chair: Well, you're talking about there's all this strategy. Strategy means you can implement a policy or a program or achieve an objective. That, of course, costs money. Was the Groupaction contract used to get that money to the people to implement the strategy that was approved by the Privy Council?

Mr. Charles Guité: No, no. Again, we're getting mixed up here on different periods of time and so forth.

During the 1995-1997 period, certainly the referendum...and, again, I forget the exact date. I can't remember when the Canada Information Office was created, but I think it was after the referendum. That's another organization I worked very closely with on sponsorship, again, because of the roles they had in promoting Government of Canada programs, which is now called, I think, Communication Canada. During the period I was there, it was CIO, Canada Information Office, and some of the advice I was getting from Groupaction was passed on to that organization also.

The Chair: But you told me the advice was strictly the amount of billboards that other people were--

Mr. Charles Guité: No, no. The billboards, forget that I ever--

The Chair: Okay. So this was at a different period of time. Groupaction were doing some strategic information, giving it to you and you were passing it on to ministers?

Mr. Charles Guité: No, no, no. The billboard example was strictly trying to address--

The Chair: Okay, Mr. Harb's question.

Mr. Charles Guité: --Mr. Harb's question. It had nothing to do with sponsorship, it had nothing to do with Groupaction.

The Chair: Okay. So the strategic advice you were receiving, which you say was vitally important--

Mr. Charles Guité: Yes.

The Chair: --and worth a great deal of money, did you pass this information on to the ministers?

Mr. Charles Guité: No.

The Chair: They were kept in the dark?

Mr. Charles Guité: They weren't kept in the dark. They saw the results that were happening.

The Chair: They didn't ask questions?

Mr. Charles Guité: They were happy with the results. Again, I cannot comment because that would be disclosing discussions I've had with the minister's office. I go back to my opening comment. I cannot comment any further on that.

The Chair: Okay. It seems to me there's a disconnect between...well, it's very, very difficult for me to understand.

Now, Mr. Quail, you said, you kept in the loop and you were having regular meetings with him every week, a couple of time a week, every couple of weeks, and the same with the minister. Mr. Quail said--and it's on the record, and I think you've read the testimony--he relied on his subordinates to do the job. He was off managing his department. Because he was a big-time manager and DM, he didn't have time to see that everybody was doing their job, therefore, that's why things got out of hand, even though he's getting paid the salary of a DM to administer his department.

Now, you said you kept Mr. Quail in loop.

Mr. Charles Guité: Yes, I did. In fact, if you went back to some of the minutes of the department, I sat on the executive committee as a member. There were two or three committees I sat on as a senior public servant in the department that was chaired by Mr. Quail. During one of those committees we gave an update, a weekly update, of where we were with activities and so forth. I kept the deputy minister informed of what I was doing.

Now, did the deputy minister get details about what event and so forth and what happened at a certain event? My answer would be, no. Did he get a list of what events were taking place? Yes. And I wouldn't expect the deputy minister to go down to the details of how many word marks and sponsorship--

The Chair: Did you tell him you were bending all the rules and ignoring the rules?

Mr. Charles Guité: No, I did not bend all the rules.

The Chair: Well, you bent some of the rules.

Mr. Charles Guité: Yes, I did.

The Chair: Did you tell him you were bending rules?

Mr. Charles Guité: No.

The Chair: You didn't tell him that at all?

Mr. Charles Guité: No.

The Chair: You took it upon yourself?

Mr. Charles Guité: That's correct. I made the decision.

The Chair: You are familiar with the Financial Administration Act--

Mr. Charles Guité: Yes, very much.

The Chair: --and the Contracting Act and you, personally, decided that doesn't apply, we are at war, therefore--

Mr. Charles Guité: No, no, I didn't say it doesn't apply. It applied, except the rules were, for a better term, bent a bit. But total disregard for the rules, no, I don't buy that.

The Chair: Do you have a comment, Ms. Fraser?

Ms. Sheila Fraser: I think, Mr. Chairman, my reports speaks for itself.

The Chair: Yes.

Well, we have 15 minutes or 20 minutes left and we have one, two, three...five people wanting to speak, so we'll go three minutes each.
* (1745) 
Mr. Mac Harb: > Mr. Chair?

The Chair: Mr. Harb.

Mr. Mac Harb: You indicated your intention to have a meeting at 6 p.m. I would suggest that the meeting will have to end by 6 p.m. So if you wanted to have that future business--

The Chair: Why does it have to end at 6 p.m.? 

Mr. Mac Harb: Because some of us will have to leave. We were here under the impression the meeting was from 4 p.m. to 6 p.m., so we're not going to be here past 6 p.m.

The Chair: Okay. We didn't indicate a closing time for the meeting, although they are normally two hours. It was my intention we'd actually have a separate meeting at 6.30 p.m., but I do note the clerk put future business on at the end of this meeting. Although I had intended the clerk issue a third meeting today at 6.30 p.m., but he hasn't. It's right on here, > "> Future Business> "> , item B, and, therefore, it is part of this meeting. We would have to suspend the meeting to allow the witnesses to leave. We normally have these meetings in public, not in camera, and we'd have to switch that over. My preference is we hear from the five.

How many people have planes to catch and have to leave? Two. Okay, so we can manage, I think. We can continue on.

Okay, we will have quorum.

Mr. Mac Harb: We're not going to proceed past 6 p.m., Mr. Chairman.

The Chair: I think we'll cut the questions off at 6 p.m. and then we'll run into the next meeting shortly thereafter. But, as I say, with only two people having to leave, I think we'll have lots of people for a quorum and we'll move forward.

Mr. Bryden.

Mr. John Bryden: Just very quickly, can it be less than three minutes? There are a few peripheral questions. I'd like to ask one little question. I don't need three minutes to ask it. Can we keep it as brief as possible?

The Chair: Okay, we will be as brief as possible.

Mr. Mayfield.

Mr. Philip Mayfield: I'll be brief, if I can.

I want to address my questions to the Auditor General, please. There's been discussion about the 12% management fee. Are you aware of any other fees in this?

Ms. Sheila Fraser: I'm afraid, Mr. Chair, I can't respond to that because we haven't done the audit on that section. We've only looked at these three contracts. These three contracts are part of the advertising budget and were not part of the Sponsorship Program and we did not come across the 12% or the 3% in this audit.

Mr. Philip Mayfield: So there's a 3%, in addition to the 12%?

Ms. Sheila Fraser: I know of it because of what I read and what I have heard, but I do not have any knowledge in our audits of how that worked.

Mr. Philip Mayfield: Yes, but there is a 3%. Is that correct?

Ms. Sheila Fraser: Yes, in certain cases, I believe.

Mr. Philip Mayfield: Okay. Are you aware of a director's power to double the value of a contract without reference to anyone else? I've never heard of that before.

Ms. Sheila Fraser: We would have to look at that in the contracting rules. I believe, if I go back to the question of Ms. Meredith, my understanding would be that might be sort of standard text, that it refers to the minister but the minister would delegate authority down into a department to a deputy minister who could then delegate down. So that could be sort of standard text that Ms. Meredith referred to earlier.

Now, as to the actual doubling and that, I don't know about that.

Mr. Philip Mayfield: I'll hurry along, now. There's lots could be said.

Do you have an estimate, even a rough estimate, of what the verbal advice we've been hearing about actually cost?

Ms. Sheila Fraser: No, I do not.

Mr. Philip Mayfield: Thank you, Mr. Chairman.

The Chair: Thank you, Mr. Mayfield.

Mr. Lebel, for two minutes, please.

Mr. Ghislain Lebel: If I understand correctly, Mr. Guit> é, you were on a mission to save Canada and defeat the separatists. Did you hear voices, perchance the Minister> '> s voice?

You> '> ve stated that in so far as the report is concerned, the benefits were positive and the results of your actions are visible everywhere. Fortunately for me, I> '> m still alive and kicking, as is my colleague. But it will come soon enough, in any event. What is the basis of your claim that awarding these contracts and circumventing the provisions of the Financial Administration Act produced beneficial results?

Mr. Charles Guité: No, no. If you look, again, I don't want to get into the political game, but, look at the level of the Separatist movement in 1995, and look at it today. It was at 49% at the referendum. Where is it today? It's fair to say, maybe 29%, 28%.
* (1750) 
Mr. Ghislain Lebel: You say that you spent $8 million to blanket the province of Quebec with billboards. In the process, not only did you bend the rules associated with the Financial Administration Act, you also contravened provincial referendum laws.

Mr. Charles Guité: I did not.

Mr. Ghislain Lebel: I have no further questions for this witness. Thank you.

The Chair: Thank you, Mr. Lebel.

Mr. Bryden, please.

Mr. John Bryden: Just very quickly, were you aware, Mr. Guité, of the 1999 change to the Access to Information Act, the amendment that made it an offence to, under 67.1(1)(c), `no person shall, with intent to deny right of access under this act, conceal a record'. Were you aware of that?

Mr. Charles Guité: Yes. I'm very aware of that.

Mr. John Bryden: So you now know that what you did, in making these records inaccessible by not creating them, would have been an offence?

Mr. Charles Guité: No. The way I read the act, and understand the act, is that if you ask for a file through Access to Information, and I, personally, take documents out and destroy, then I'm subject to be guilty of an offence under the Access to Information Act. But, to say that I did not put something on file because I kept it in this file--

Mr. John Bryden: In your head.

Mr. Charles Guité: --in my head, is contravening the Access to Information Act. I don't think so.

Mr. John Bryden: At the time, this amendment occurred after your time, in any event. So, what I was asking you is that if this amendment existed in 1997, you would have still felt entitled to not create records?

Mr. Charles Guité: No. If the amendment was done after I left, I can't comment. If the amendment had been done prior to my departure, obviously, I would have to abide by those amendments.

Mr. John Bryden: Then you feel that not creating records, not concealing records, I'm not trying to entrap you, I'm trying to clarify the point.

Mr. Charles Guité: I know exactly what you're saying.

Mr. John Bryden: The amendment which came in this, Colleen Beaumier's private member's bill, C-208, and one of the things it says is that no public servant shall deliberately conceal a record. Now, what I gather from your testimony is, you deliberately did not create records--

Mr. Charles Guité: Therefore, I did not conceal them.

Mr. John Bryden: Well, we're going to have to fix the act if that's what you did because I would have thought that conceal a record, and not creating a record are one and the same.

Thank you, Mr. Guité.

The Chair: more work to do, Mr. Bryden.

Mr. Martin.

Mr. Pat Martin: I would like to go back to the red Mustang. I would like to know how much you sold it for, and how much you paid for it.

Mr. Charles Guité: Again, I would have to check my records. I know what I sold it for, $35,000. What I paid for it was a lot more than that.

Mr. Pat Martin: You sold it to Mr. Brault.

Have you ever been to Mr. Brault's chalet in the Eastern Townships?> 

Mr. Charles Guité: No.

Mr. Pat Martin: Did you know him on a personal level, above and beyond your professional relationship than awarding contracts to Groupaction?

Mr. Charles Guité: No.

Mr. Pat Martin: Have you been working since you left the public service as a lobbyist for the Institute of Canadian Advertising, and the Association des agences de publicité du Québec?

Mr. Charles Guité: No. I've worked for the ICA, the Institute of Communication Advertising Agency, not as a lobbyist, but as Vice-President of Government Relations. The first year I was with them, the Association des agences de publicité du Québec paid part of my fees, but have withdrawn from that agreement. Therefore, the last year, I worked strictly for ICA. When this controversy broke out, I took a leave of absence, because as Vice-President of Government Relations, when the minister at the time when this started, was Mr. Boudria, publicly said, Mr. Guité, I may have met him once, or twice, I don't really know him. I differ his comment. I'm not here to discuss that, but I know Mr. Boudria very well, and he knows me very well. But, that's not the issue.

Mr. Pat Martin: Was Groupaction a member of either of those associations that you represented?

Mr. Charles Guité: Groupaction is a member of both associations.

Mr. Pat Martin: Did you lobby the government of Canada at all, in your capacity as a government relations officer, did you go to Public Works, government services, communications co-ordinating service, to try and seek to advocate on behalf of those companies?

Mr. Charles Guité: No, I could not do that. First of all, I could not do that the first year I left the government and I could not do that as vice-president of government relations for the IC. It would be a conflict of interest.

The Chair: Is that it, Mr. Martin?

Mr. Pat Martin: Yes, Mr. Chair.

The Chair: Okay, Mr. MacKay.
* (1755) 
Mr. Peter MacKay: Thank you, Mr. Chair.

Mr. Guité, do you know or have you ever met with a Jean Carle?

Mr. Charles Guité: Yes, I've met Jean Carle.

Mr. Peter MacKay: And did you meet him regularly during this period of time--the referendum--1995 and on?

Mr. Charles Guité: I can't recall.

Mr. Peter MacKay: Did you discuss these Sponsorship Programs with Mr. Carle?

Mr. Charles Guité: I can't recall.

Mr. Peter MacKay: You can't recall?

Mr. Charles Guité: No, what I wanted to say was based on my initial statement that--

Mr. Peter MacKay: Oh, you won't answer.

Mr. Charles Guité: Won't answer.

Mr. Peter MacKay: Okay. Will you answer whether you had similar meetings with Mr. Goldenberg of the PMO?

Mr. Charles Guité: I've never met Mr. Goldenberg.

Mr. Peter MacKay: Never met Mr. Goldenberg.

Did you at any time tell Huguette Tremblay, who was working in the advertising contract department, not to ask questions about the files?

Mr. Charles Guité: No.

Mr. Peter MacKay: You acknowledged that you stayed on, you stayed past the time in which you wanted to be there to train Mr. Tremblay. Did he at any time, at any time during that six-month period, express concern to you about the way these contracts were being awarded?

Mr. Charles Guité: No.

Mr. Peter MacKay: He never did.

Can you tell us whether you at any time during your tenure approved contracts with the full knowledge the work had not been fully completed?

Mr. Charles Guité: No.

Mr. Peter MacKay: You at no time did that? The strategic advice--

The Chair: Do we get an answer for that, Mr. MacKay?

Mr. Peter MacKay: You're saying at no time.

The Chair: Okay.

Mr. Charles Guité: No.

Mr. Peter MacKay: You've never signed off on a contract knowing that it wasn't--

Mr. Charles Guit> é: That work had not been done.

Mr. Peter MacKay: And you never told the Auditor General anything differently?

Mr. Charles Guité: No.

Mr. Peter MacKay: The chair asked you about polling advice. The strategic advice that was provided, was that ever political advice--

Mr. Charles Guité: No.

Mr. Peter MacKay: --that could be used for anything other than contracts or fighting the separatists?

Mr. Charles Guité: No.

Mr. Peter MacKay: No. Can you tell us whether you knowingly broke the rules at any time--the rules as you knew them? You said you bent them. What is the difference? Can you explain the difference between bending and breaking the rules?

Mr. Charles Guité: Breaking a rule would be approving an invoice knowing the work hadn't been done.

Mr. Peter MacKay: Okay. So bending the rule would be leaving information out of a file?

Mr. Charles Guité: No. I didn't leave any information out of a file. The information that I had and I put on file, I put it on file.

Mr. Peter MacKay: You just told Mr. Bryden that you left information out of files. You didn't reduce it to writing--

Mr. Charles Guité: No, no.

Mr. Peter MacKay: --you filed it in your head.

Mr. Charles Guité: No, no, no. I didn't say I left information out.

Mr. Peter MacKay: You filed it in your head.

Mr. Charles Guité: I said you cannot put information in a file if you have not produced it.

Mr. Peter MacKay: Okay.

Mr. Charles Guité: There's quite a difference there.

Mr. Peter MacKay: So you deliberately didn't reduce it to writing so that it wouldn't wind up in a file. Correct?

Mr. Charles Guité: Not necessarily, no.

Mr. Peter MacKay: Just answer that question. You deliberately didn't put it in writing so that it would not be in a file and could therefore not be disclosed. Correct?

Mr. Charles Guité: Correct.

Mr. Peter MacKay: That, I suggest to you, would be wrong. Do you not agree that was wrong?

Mr. Charles Guité: No.

Mr. Peter MacKay: You don't believe that was wrong?

Mr. Charles Guité: No.

Mr. Peter MacKay: You don't believe that's contrary to the Access to Information changes that Mr. Bryden has now referred.

Mr. Charles Guité: That happened after I left the government.

Mr. Peter MacKay: Well, you're now aware of it. Do you not believe that's inconsistent with the Access to Information Act?

Mr. Charles Guité: The rules did not apply when I was there.

Mr. Peter MacKay: I see.

The Chair: Okay, well, the rules did not apply, Mr. Guité, when you were there. I'll just quote the Auditor General at paragraph 34: > "> Another former executive director, now retired...> "> --which I presume is you--> "> ...indicated that payments were approved with the knowledge that the requirements, as written in the contracts, had not been fully met> "> , which is contradictory to you just gave to Mr. MacKay.

Mr. Charles Guité: Well, that's the Auditor General's comment. 

The other thing, I would like to make a comment. In the previous minutes that I've read, I think the Auditor General's office said that I have signed off on those minutes, which is wrong. I have signed no minutes.

Ms. Sheila Fraser: I have it right here, Mr. Chair.

Mr. Charles Guité: Let me see my signature.

Ms. Sheila Fraser: Do you want to see it?

The Chair: Ms. Fraser.

Ms. Sheila Fraser: I think even today, Mr. Chair, Mr. Guité has clearly indicated he paid for verbal advice. None of those contracts indicate there was any verbal advice--

The Chair: To be required.

Ms. Sheila Fraser: To be required--so payment supposedly was made for something that was not stipulated in the contract. As well, there were other anomalies, which we have listed, but that is the most obvious one. He has indicated to us in writing and he has indicated today before this committee, so I will stand completely behind everything we have put in our report.> 

The Chair: Okay, we can't have a private conversation.

Ms. Fraser, you have the minutes that are signed by Mr. Guité?

Ms. Sheila Fraser: I have a comment...a letter from Mr. Guité saying that if there was a deletion made, he would sign these minutes--

Mr. Charles Guité: That's right, and I have not signed it.

Ms. Sheila Fraser: --which indicates his agreement with what was in these minutes.

A voice: They're not signed.

Ms. Sheila Fraser: I'm sorry, we were conducting an audit. This, to us, is indication that he was in agreement with the minutes of a meeting that we conducted with him.
* (1800) 

Mr. Charles Guité: No, I disagree.

The Chair: Okay. Ladies, and gentlemen. That brings this portion of the minutes of the meeting to a close.

Mr. Harb.

Mr. Mac Harb: Mr. Chair, if we wanted to talk about future business, I would suggest that be in camera, too, because we're talking about future business. You may be referring to a discussion that we had during the day, so I would suggest not to move out of camera, but to stay in camera. I'm sorry, we can vote on that if you want to.

As a result of this, if we want to make a provision for the witnesses to leave, and then we will continue immediately after that.

The Chair: Mr. Harb has made two points. One, we will suspend the meeting for a few minutes, in order for the witnesses to leave. 

The question is, and I presume you are making a motion, Mr. Harb--

Mr. Mac Harb: I'm making a motion, yes.

The Chair:--that we stay in camera to deal with future business.

Mr. MacKay.

Mr. Peter MacKay: Mr. Chair, before we lose the witnesses here, I don't think you got a response from Ms. Fraser, to be fair, to your question about her comment in this report that payments were approved with the knowledge that requirements, as written in the contracts, have not been fully met, and-- 

The Chair: She stood by her report.

Mr. Peter MacKay:--whether she was willing to attribute that to Mr. Guité.

Ms. Sheila Fraser: Yes. I thought that I had been clear, and I think Mr. Guité confirmed that today. The payments were made, according to him, for work which was not specified in the contracts.

Mr. Peter MacKay: So, you are referring to him, in quoting the minutes?

Ms. Sheila Fraser: Yes.

The Chair: Mr. MacKay, we're off track here.

We have a motion to stay in camera. Debate.

Mr. Bryden.

Mr. John Bryden: If I can just make a quick point. I think we will have to make reference to testimony in order to discuss future business. I think Mr. Harb's point is well taken. If we can somehow agree not to discuss, but, I don't see how that would happen. We would have to make arguments.

I would be very interested in getting some feedback from the members, actually, on both sides, because I have a few observations I would like to share with this committee. I can't share them in a public forum, so, I would like to share them in a private forum, if I may.

The Chair: The motion is, to stay in camera while we deal with future business.

Are you ready for the question?

(Motion agreed to)

The Chair: What was the count, Mr. Clerk, 9-7, was it?

The Clerk: Yes, 9-7.

The Chair: The motion was carried 9-7.

This meeting is now suspended for, let's say, five minutes.

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