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Guite testifies he met with PMO and ministers

(PoliticsWatch posted April 22, 2004) OTTAWA - The former director of the sponsorship program told the Commons committee investigating Adscam this morning that he met regularly with most Public Works ministers and the Prime Minister's Office while he oversaw advertising and public opinion research in the department of Public Works. 

Chuck Guite told the committee that while he met with the ministers and PMO they were not involved in the selection of ad agencies. 

"While I was executive director, I want to make it very clear - I repeat, very clear is that the PMO, Minister Gagliano, Minister Dingwall never suggested the names or got involved in the agency selection process," said Guite.

"Did the PMO and Ministers provide input and decisions with respect to specific events that were sponsored and the allocation to specific firms. Absolutely." 

He later put the involvement of political forces in the $250 million sponsorship program and during the referendum campaign this way, "During the pre-referendum, and obviously during and after, Chuck Guité didn't decide he's going to do this on his own."

Numerous times during his testimony, Guite described the Auditor General's report, which detailed how $100 million went to Quebec ad agencies for little or no work, as misleading or wrong. 

In his opening statement, Guite targeted the Auditor General's report and said that her inability to audit the records of the ad agencies hindered her from making conclusions. 

"In this regard it is my opinion that the Auditor General's report is mistaken and this conclusion is potentially misleading because it has given the perception to the public that $100 million has disappeared into thin air," Guite said. 

Some Liberal MPs said Guite's testimony is more evidence that the Auditor General's $100 million figure did not mean that $100 million has disappeared. 

"There's nobody in a better place to inform than (Guite)," said Liberal MP Robert Thibault.

"I don't disagree with the Auditor General, but some people read the Auditor General's report and think $100 million has vanished. The Auditor General doesn't say that." 

Guite also explained why ad agencies appeared to be collecting large commissions for what often appeared to be little more than transferring money from the government to the event sponsors. 

He said one has to understand that it is the nature of the industry for ad agencies to take losses on commissions for smaller contracts, while make up for it on larger ones. 

"Now, it is no different than the private sector. What happens in a system like that is that you will have a project where you will lose your shirt. You will have another project where you'll make the money, as any business."

But Conservative MPs were not so willing to believe Guite. 

"This looks like money laundering," said Conservative MP Vic Toews. 

Guite testified that he knowingly interfered in the contracting process by authorizing agencies to carry out work without a pre-existing contract, saying it is not uncommon practice to have a firm start work without a contract on verbal direction. 

But he refuted the testimony of Public Works whistleblower Allan Cutler, who told the committee that Guite convened a Nov. 17, 1994 meeting with staff to inform them that normal advertising rules and regulations would no longer apply. 

However, he did testify that his position did report directly to the minister of public works and the PMO, but that that arrangement had been set up back in 1979 by the Conservative government of Joe Clark. 

While he denied the testimony of former public works minister Diane Marleau, who said that upon replacing Dingwall Guite entered her office and informed her that he reported directly to her, Guite did say that upon Marleau's arrival at public works he decided to work directly with the PMO because Marleau "didn't have the feel for what we were doing." 

"So I basically got a comment from PMO, 'Well, look, over for the next little while, deal with us,' which I did. And I've met (former PMO chief of staff Jean) Pelletier at my request where I felt that some of the stuff we were doing may have a political impact in la belle province and what better person to go and talk to than the Prime Minister's Chief of Staff; and I had that access."

But that did not mean that he was Pelletier's lap dog. Guite said that "several times" he turned down sponsorship requests from the PMO. 

Guite also had an explanation for why his branch used ad agencies to transfer sponsorship funds to Crown corporations. According to Guite, a government department cannot directly transfer money to another department or Crown corporation. 

"To do that I have to go through Treasury Board because that's taking funds from one portfolio, and even worse, to a crown corporation," he explained. "So there's quite a system to go in. By using an agency, which I've done to every sponsorship we did, I used the agency to get that money into VIA Rail, but that money didn't go into VIA for their operation, it went in for a sponsorship." 

Guite will continue his testimony later this afternoon and will likely be before the committee tomorrow as well. 
 
Check out these related links:

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


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