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What the PM's friend said to PoliticsWatch about Guite 

(PoliticsWatch posted April 21, 2004) OTTAWA - On Feb. 12, two days after the Auditor General released her report on the sponsorship scandal and at about the time internal Liberal Party polling must have shown the party's numbers were tanking, Prime Minister Paul Martin held an extraordinary news conference at the National Press Theatre to speak frankly about what he knew about the scandal and when he knew it. 

In that press conference, Martin said there had to be political direction in the scandal, but that he was not aware because former prime minister Jean Chretien kept him out of the loop of matters involving Quebec. 

"In short, my advice was not routinely sought on issues related to Quebec," the PM said of his time in the Chretien cabinet. "It is no secret that I did not have an easy relationship with those around the former prime minister" 

Martin may not have known about what went on in the world of Jean Chretien's Quebec, but what is growing clearer each day is that Martin's closest advisers were well aware of what was going on in the world of Chuck Guite, the executive director of the sponsorship program, who also controlled advertising and public opinion research at Public Works as far back as the Mulroney-era.

Richard Mahoney, who is the Liberal nominee for Ottawa-Centre and will be up against former NDP leader Ed Broadbent in the upcoming federal election, is one such person. 

Mahoney's resume shows that he was Martin's executive assistant between 1988 and 1990, but since that time he along with Liberal campaign co-chair David Herle and PMO chief of staff Tim Murphy have been considered one of the prime minister's closest advisers. 

Toronto Star bureau chief Susan Delacourt's book Juggernaut explains in detail how valuable Mahoney was to Martin's takeover of the Liberal Party one MP at a time from outside of government. 

"It was Richard Mahoney's job to attend to the care and feeding of the new caucus supporters, quietly meeting with them and keeping them informed," she wrote.

"This mostly diplomatic function was perfectly suited to Mahoney's ample schmoozing abilities. Every month or so he would invite a small group of MPs over his offices at the Fraser Milner law firm … He would order some gourmet takeout pasta from Fettucine's restaurant on Elgin Street, lay on a case of wine, and host the parliamentarians in for a casual evening of gossip… They were simply another way of keeping the Martin team connected and growing." 

A few weeks back, the Globe and Mail reported on a conservation Mahoney had "with a person who can be trusted" about Chuck Guite in 2002. 

"Mr. Mahoney was very unhappy about Chuck Guité, and had been unhappy with him for some time," the Globe story explained. "The people around Paul Martin had long known and were concerned about Mr. Guité, Mr. Mahoney said. Everyone knew that he had worked to procure advertising contracts for Tory-friendly firms when Brian Mulroney was prime minister. When the Liberals came to power, the Martin wing of the party had assumed Mr. Guité would be dispensed with. Instead, he was retained and promoted in 1997 to run the sponsorship program.

"Mr. Martin's people had urged then-prime minister Jean Chrétien's people to get rid of Mr. Guité, and appoint someone with a less partisan approach, Mr. Mahoney said. Those warnings had been ignored, and now look what had happened."

However, the Globe article was hearsay as Mahoney "refused repeated requests" for an interview with the Globe. 

But a few weeks back, PoliticsWatch caught up with Mahoney at a debate on the foreign ownership of Canadian media between himself, Broadbent and the riding's Green Party candidate. 

During the debate, in front of a crowd that was largely NDP-friendly, Mahoney described his former broadcasting career as a political analyst with TV Ontario, which he left in October to campaign full time. 

"If you had told me then that I would be running against a former party leader and answering questions about the sponsorship scandal, that spot on TVO is looking pretty good right now," he said. 

After the debate, PoliticsWatch asked Mahoney in a brief interview about the Globe story in question. 

"That's the strangest story I've ever seen," he said. 

So, was it true that friends of Paul Martin were aware of problems with Guite favouring the Tories and wanted someone to get rid of him?

"That is a view I've held for some time," he answered. "He had that role under Mr. Mulroney. But what that has to do with what's going on now, I have no idea.

"You're talking about a conversation that I don't even remember who it was I had. I was not in government and I never worked in government. So I was just talking about general impressions I've heard on the street and so forth.

"I've never met Mr. Guite, never had any dealings with him. There was a general impression about him." 

So why would people outside of government be aware of a general impression about a public servant in the Public Works department?

While PoliticsWatch never got to ask Mahoney that question, documents leaked this week and documents tabled with the Public Accounts committee investigating Adscam by Public Works whistleblower Allan Cutler illustrate that Guite and his sector was in a battle with finance department officials in the mid-1990s over numerous public opinion research contracts to the firm Earnscliffe, which is the home office to number of members of Martin's inner circle. 

A July 1995 memo from Guite to Warren Kinsella, an aide to then public works minister David Dingwall, outlines nearly half a million dollars in Finance contracts with Earnscliffe and a polling affiliate, Anderson, which Public Works believed breached contracting guidelines. 

"It is felt that immediate action must be taken to correct the situation," wrote Guite to Kinsella. "As you are well aware, the industry at large is not satisfied with the current process and if escalated it could become embarrassing to the government and certainly our minister." 

Now the prime minister is facing a barrage of questions in the House of Commons about the feud between some of his associates and Guite and whether his officials tried to draft contract requirements that would favour Earnscliffe over other firms. 

"The documents show nothing of the kind," the PM said in the House today. 

"I affirm the facts as they in fact were. The fact is that the contract was bid on open tender and the fact is it was administered and it was adjudicated by the Department of Public Works, not the Department of Finance."

The PM says this despite Guite's memo to Kinsella clearly stating that six of the seven contracts were either "issued by finance" or done "without the knowledge of my sector." 

Conservative MP Jason Kenney says Mahoney's knowledge of Guite fits the pattern of what appears to be going on at the time between Guite and Martin's people. 

"It's well known that Earnscliffe had an ongoing battle with Public Works in the person of Chuck Guite and he was a barrier to their easy access to government polling contracts," he said. "It's obvious that they had it out for him.

"But it sounds like Mr. Mahoney heard rumours going way back and this was common knowledge. So it's implausible for Paul Martin to suggest that he was completely and totally ignorant about the controversy in public advertising." 

More light will be shed tomorrow when Guite makes his first appearance before the Public Accounts committee. 

Liberal and Conservative sources both describe Guite's testimony as a wildcard, with neither side knowing whether Guite will stonewall or whether he is fed up about being painted by some Liberals as the fall guy for the scandal and will name names. 

All of Ottawa will pause when Chuck Guite arrives on Parliament Hill tomorrow. 

Check out these related links:

arrow-trans.gif (111 bytes) Public Accounts Sponsorship Hearings 

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