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Ad problems began in 1994

(PoliticsWatch posted March 11, 2004) OTTAWA -  Adscam widened today when a Public Works whistleblower told a Commons committee that interference with the government advertising contracting began in 1994. 

Public servant Allan Cutler told the Commons public accounts committee that Charles Guite, the man who later became executive director of the sponsorship program, began to interfere with his job negotiating individual contracts with agencies. 

According to Cutler, in 1994 Guite was "authorizing agencies to carry out work without pre-existing contract."

This led to a Nov. 17 meeting between Guite, Cutler and other members of the contracting group at Public Works. 

"At this meeting, Mr. Guite told us that normal rules and regulations should not apply to advertising," said Cutler. "He said he would talk to the minister to have them changed." 

The minister of public works at that time was David Dingwall, who is now president of the Royal Canadian Mint. 

"A week later, I was informed that myself and two other employees who worked for me would move to Mr. Guite's section and report to him immediately. At this point in time, Mr. Guite's responsibilities were expanded to include not only the selection of advertising agencies, but also the negotiation and award of contracts to selected agencies."

Cutler then said after the transfer he began noticing that contracts were regularly being backdated, commissions were paid for services apparently not performed and there was the appearance of improper advance payments. 

"I was expected to simply issue contracts on terms provided by Mr. Guite," Cutler said. "I was no longer expected to negotiate prices with advertising firms or to insist on the established government contracting practices.

"When I raised concerns about carrying out these instructions, Mr. Guite became upset. It quickly became apparent to me that my employment was in jeopardy."

Cutler's testimony changes the complexion of the Adscam dramatically. It appears now that the problems with government contracting pre-dated the sponsorship program and even the Quebec referendum. 

In May of 2002, then prime minister Jean Chretien defended the theft of money in the name of saving the country after the referendum, which saw a narrow win for federalist forces. 

"Perhaps there was a few million [Canadian] dollars that might have been stolen in the process. It is possible," Chretien said at the time. "But how many millions have we saved to the country because we have re-established the stability of Canada as united country?" 

Committee chair John Williams now says he does not believe that the scandal is related to just the national unity file. 

"I don't buy that argument at all anymore," said Williams. "They started back in 1994 breaking the rules, moving the cash out down the start of the pipeline and I don't see very much connection between this illegal scam and saving the country as the former prime minister would have us believe." 

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