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Adscam report slams Martin

(PoliticsWatch posted May 18, 2004) OTTAWA - Prime Minister Paul Martin is mentioned 22 times in a scathing interim report by opposition members of the committee investigating Adscam that suggests he should resign.

"Mr. Martin knew enough to try to exert political interference to ensure his friends, including those helping him seek re-election, were rewarded, according to testimony and records," the 11-page report released by opposition members of the Public Accounts committee states. 

"Mr. Martin has told Canadians that he had heard rumours of trouble. However, the documents and testimony presented to the Committee indicates he knew more; that for years he was intimately aware of rule breaking in the handling of millions of dollars for Liberal friendly agencies, including those whose officials are helping him seek re-election."

The report then indirectly suggests that the prime minister should resign. 

"In an effort to get to the bottom of the scandal, opposition members of the committee hold the prime minister to his word. 'Anybody who is found to have known that people are kiting cheques, that people are falsifying invoices -- me or anybody else -- should resign,' Mr. Martin said." 

Even though he cancelled the sponsorship program and launched a series of initiatives he said would shed light on how $100 million in ended up in the hands of a few Quebec ad firms, Martin is mentioned eight more times than former prime minister Jean Chretien and just as often as former public works minister Alfonso Gagliano.

Oddly, a Globe and Mail story that appeared this morning reporting on a leaked copy of the report did not mention Martin once. 

However, the opposition's report, titled Unearthing the Truth: Who gave the orders? Where did the money go?,  holds both Chretien and Martin responsible for the sponsorship fiasco and
concludes Liberal politicians "directly influenced" the handing out of sponsorship program money to reward friends of the Liberal party for their support.

"We believe it was carried out with the participation of key members of Mr. Chretien's government, including those now holding high positions in (Prime Minister Paul) Martin's cabinet," the report claims, adding that both Martin and Chretien should be held accountable. 

At today's press conference, the opposition again accused Martin of failing to live up to his promise to shed sufficient light on the sponsorship scandal before going to the polls. 

Just two days after the Auditor General issued her report in February, with the Liberals sinking in the polls, Martin held a snap press conference in the same room as today's press conference in which he denied knowledge of the scandal and promised to get to the bottom of it. 

He invoked the words of former prime minister Pierre Trudeau in responding to reporters' questions about how serious he was about cleaning things up. 

"Just watch me," the PM said. 

NDP Leader Jack Layton accused Martin of shedding "crocodile tears" at that press conference. 

"We're still watching. We're still waiting," he said. 

With an election call expected on the weekend, the committee's work has effectively been put on hold. 

In the run up to the election over the past three weeks, Liberal MPs on the committee used their majority to ram through motions aimed at wrapping up testimony and moving the committee to in-camera meetings to deliberate on whether to issue an interim report on what they had discovered to date. 

Those in-camera meetings failed to create an all-party report with conclusions, so the committee issued a summary of evidence to date, without any conclusions. 

The opposition's decision to release their own report with conclusions and recommendations is ironic given they had suggested that it was the Liberals who had planned to issue a "whitewash" report before an election that would clear the party's name and deny political interference. They had also argued that the committee was unable to come to any conclusions given that it had only heard from approximately one-third of the more than 100 witnesses on witness list compiled for the committee by the auditing firm KPMG. 

"I think the evidence we have so far, while not complete, points to the Prime Minister's Office directing this rule-breaking exercise in the sponsorship program," said Conservative MP Jason Kenney. 

"We do not have all the details. This is like putting together a very complicated jigsaw puzzle. We have maybe a third of the pieces that we need to put together.

"We can see this thing taking shape after 11 weeks of hearings and 40 witnesses … but it's not a complete and detailed picture." 

Layton said that Canadians will be able to draw their own conclusions about political direction and involvement based on what the Auditor General unearthed and what the committee has heard to date. 

"You see the very companies that got the money are close buddies with people in the cabinet - they stay with each other, they hob knob together, they're good friends, they form relationships and they give political donations.

"I mean, it doesn't take any rocket scientist to sort out the relationship and, frankly, Canadians are ready to pass judgement on this." 

The report's links to Martin and the scandal are based more on testimony regarding government contracting practices in general than the sponsorship program. 

In their report, Martin's links to one of the ad firms executives, Claude Boulay, formerly of Groupe Everest, are noted, as Boulay owned one of the ad agencies that received sponsorship money and donated money to the Liberal party. 

"In some cases company officials worked directly on campaigns for top Liberal officials," the opposition report explains. "In his testimony, former Groupe Everest president, Mr. Claude Boulay, said he had worked on Mr. Paul Martin's 1990 leadership campaign and the Liberal party's 1997 election campaign. 

"He testified that, at times, he and his company worked for the Liberals for free. Mr. Boulay also testified that he, his wife, and his companies, have contributed at least $94,000 to the Liberal party."

The person mentioned most in the opposition report is Chuck Guite, the former executive director of the sponsorship program, who is now facing six counts of fraud involving three Groupaction contracts and advertising work related to the gun registry. 

Guite told the committee that the government viewed the large profits the agencies collected on some files as a way balancing the large losses they suffered on others.

"We found this hard to swallow," the report concludes. "Set next to the few facts that have so far emerged, the opposition members view the big profits as a reward for the advertising agencies. 

"It was also a way to set up dry-cleaned 'slush funds' for Liberals to use as they saw fit. Records and testimony strengthened our belief that previous support and favours done by agencies for the Liberal party, as in the case of Mr. Boulay, were being repaid through generous government contracts.

"This reward system was evident in the case of Prime Minister Martin, while he was minister of Finance, the committee learned."

The opposition report also used the Auditor General's review of the government's handling of public opinion research and advertising activities to raise questions about Martin. 

The opposition said it found "instances where rules were broken the same way in awarding contracts to the same companies involved in the sponsorship program."

"On this issue, testimony and records given to the committee exposed political
interference by Mr. Martin and Mr. Ralph Goodale, (then Agriculture minister) in Mr. Chretien's cabinet, to sway work to friendly ad agencies." 

The report uses Martin's relationship with Boulay to suggest that Everest had benefited from that relationship. 

"Mr. Martin was Finance minister when his office favored Groupe Everest to handle the department's Retail Debt Strategy. 

"A letter dated May 30, 1994, by Mr. Martin's former chief of staff Terrie O'Leary, said Mr. Martin and his office agreed that 'it makes sense for the strategy to be developed by Gingko/Groupe Everest in collaboration with the market researchers, rather than another ad agency.'"

The opposition report also focuses on how a number of contracts were awarded from the finance department in the mid-1990s to the Earnscliffe Strategy Group, a firm whose principals are active and long-time supporters of the prime minister's leadership bid. 

"In another instance, Mr. Guite testified that in 1994, Ms. O'Leary called him on the
handling of contracts for public opinion research. Ms. O'Leary asked that specific
companies, including Earnscliffe, be considered. Her comment in making the request was, 'Paul would prefer . . .,' Mr. Guite told the Committee.

"Yet another example shows Mr. Martin's department ignored the rules to award contracts to ad agencies friendly to him and his party. The alarm was raised by Mr. Warren Kinsella, who was an aide to David Dingwall while he was Public Works Minister. Mr. Kinsella is also one of Mr. Chretien's fiercest supporters.

"A previously secret government 1995 memo from Mr. Kinsella, to Mr. Guite, complains about the way contracts went to Anderson Consulting and the Earnscliffe Strategy Group, agencies staffed with Mr. Martin's friends who had helped his leadership bid, and later his transition into the Prime Minister's Office. 

"The call for tendering one of the Finance Department's contracts for $219,000, appeared to be tailored so that only Earnscliffe would win it, even though 17 other agencies were interested, according to the memo. Mr. David Herle, an Earnscliffe executive, is one of Mr. Martin's top election strategists."

At today's press conference, the opposition party members were faced with a barrage of questions from a skeptical press gallery about whether they were issuing their report in order to tarnish the Liberals before an election call. 

"This isn't an opposition scandal," responded Kenney. "This is a Liberal scandal. And we are doing our job holding the government to account. That's what we're supposed to do in the opposition." 
Check out these related links:

arrow-trans.gif (111 bytes) Unearthing the Truth- Who gave the orders- Where did the money go- (PDF)

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

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