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Ex Via chief denies wrongdoing 

(PoliticsWatch posted April 7, 2004) OTTAWA - The recently fired president of Via Rail criticized Auditor General Sheila Fraser's description of Via Rail's role in the sponsorship scandal in his testimony before the Public Accounts committee this morning. 

Marc LeFrancois told the Commons committee investigating Adscam that past audits of Via did not criticize the two projects that were included in the Auditor General's report on the sponsorship program. 

In her report, Fraser panned Via entering into a verbal agreement with Chuck Guite, the executive director of the sponsorship program, to pay $910,000 without a contract to a Quebec firm producing a television series on hockey legend Maurice "Rocket" Richard. 

Public Works's Communications Coordination Services Branch (CCSB) agreed to reimburse Via at a later date. Via made three payments to the production firm L'Information essentielle in 1999 -- $650,000 in January and two $130,000 payments in September. 

In March of 2000, CSSB entered into a contract with Lafleur Communications for production services totalling $862,500. Lafleur received a $112,500 commission and then paid a $750,000 invoice from Via for sponsorship funding. 

This still left Via $160,000 short of the original money loaned to Public Works. But Via decided to record the $160,000 as an advertising expense, concluding it had received good visibility from the Rocket Richard series. 

"In our opinion, CCSB created a fictitious contract and made payments of $862,500 that contravened the Financial Administration Act," Fraser wrote. 

But in his opening statement today, LeFrancois took exception with Fraser's use of the word "fictitious," calling it "highly negative." 

"The dictionary definition of fictitious is 'imaginary, unreal, counterfeit and not genuine,'" LeFrancois said. "Via Rail did not issue any invoice that was fictitious. The actual invoice issued by Via Rail is attached to my affidavit. It is real and accurate." 

But during questioning, LeFrancois was asked to explain his relationship with Jean Lafleur, the president of the ad agency that repaid the Public Works money to Via in 2000. 

Conservative MP Jason Kenney asked LeFrancois if he had ever traveled with  Lafleur. 

LeFrancois said Lafleur was on two trips with him and others to Europe, including a Team Canada-like visit to Italy that was also attended by former public works minister Alfonso Gagliano and another trip to London. 

LeFrancois said he did not know why Lafleur was on the trip to Italy and that he never questioned his presence. 

"No. I never ask questions of people," he testified. 

He was also unable to explain his presence on a trip to London with other Via executives, saying that it may have been to look at rail cars "or he just came on his own." He said he doesn't believe Via paid for Lafleur's trip. 

Kenney then asked LeFrancois if he considered Lafleur a friend. 

"This is a question you should ask Mr. Lafleur," LeFrancois responded. 

He later admitted that Lafleur was "a good friend. I know him well." 

LeFrancois also used his appearance before the committee to comment on his dismissal by Transport Minister Tony Valeri last month. 

In February, LeFrancois was given a few days to demonstrate why he should not be dismissed as a result of the Auditor General's report. 

He said it appears he had been "judged and condemned" before he met with Valeri on Mar. 1.

"The meeting turned out to be a monolog on my part as the minister had no questions to ask of me," he said. "It is following a phone call from Toronto the next morning at 6:30 a.m. that I learned of my dismissal announced on the front page of the Globe & Mail." 

Yesterday, LeFrancois filed a $2.7 million wrongful dismissal suit against the federal government in Quebec Superior Court alleging he was defamed and his firing was undertaken "in an irrational, unfair and illegal fashion for politically opportunistic reasons." 

LeFrancois becomes the third Crown corporation executive to be dismissed since the Auditor General's report to sue the federal government. Former Via chair Jean Pelletier and former Business Development Bank of Canada president Michel Vennat have also filed suits. 

However, LeFrancois' dismissal is the only one directly related to the findings of the Auditor General's report. 

Check out these related links:

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

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