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Tories say memos link PM to Adscam practices 

(PoliticsWatch posted April 20, 2004) OTTAWA - The Conservative Party produced documents in the House of Commons today detailing problems Public Works officials had in 1995 with contracts awarded to the Earnscliffe Strategy Group for public opinion and polling work for the Department of Finance when Prime Minister Paul Martin was minister. 

The Conservatives, who obtained the four memos from the French-language private broadcaster TVA, allege these documents reveal the prime minister was well aware of problems with contracting practices in the government well before the sponsorship program began. 

"The Prime Minister told us that he saw nothing and that he knew nothing," Conservative Leader Stephen Harper said in question period. "But the documents we have today show that the finance department was the first to break the contracting rules to the tune of hundreds of thousands of dollars, to benefit the prime minister's political allies at Earnscliffe before 1996, laying the groundwork for the sponsorship scandal.

"Does this not show that the father of this scandal is not Jean Chrétien, it is this Prime Minister?"

Confusion reigned on the Liberal benches as both the prime minister and Finance Minister Ralph Goodale were unaware of the documents in question, at times confusing them with 1994 memos written by Martin aide Terrie O'Leary regarding the awarding of a contract to Groupe Everest.

Those documents were tabled in the House by Tory MP Peter MacKay on the day a Public Works whistleblower, Allan Cutler, testified before the Commons Public Accounts committee investigating Adscam. 

Martin never directly answered the question and said the contracts were already in place by the Conservative Party before the Liberals came to power. 

"We asked to have open bids and contracts," said the PM.

After repeated questioning, the prime minister fought back against the Opposition's attack, criticizing them for not applauding an announcement he made earlier improving legislation aimed at making cheaper drugs available for developing countries.  

"They refuse to accept that this country is in the lead," the PM said. "They refuse to accept in fact what all other parliamentarians in this House are in the process of doing. They are making this a mockery of what the Parliament ought to be."

The documents in question appear to back an Ottawa Citizen story from last month reporting that the former director of the sponsorship program, Chuck Guite, blew the whistle on Finance department officials regarding contracts going to Earnscliffe, when he oversaw advertising and public opinion polling at Public Works. 

"Mr. Martin's officials were ordered to a meeting of senior Privy Council and Treasury Board officials and told to stop the practice," the Citizen reported last month. 

Two of the memos are the exchanges between Guite to then public works minister David Dingwall's executive assistant Warren Kinsella. 

In a July 24, 1995, memo from Kinsella to Guite, Kinsella raised questions to Guite about seven contracts between finance and Earnscliffe and its then polling subsidiary Anderson valued at $452,000. 

"None of these procurements were conducted through (Public Works), contrary to cabinet-approved guidelines," wrote Kinsella. "This is simply unacceptable." 

Four days later, Guite gets back to Kinsella and explains the problems with each contract, including four that were conducted "without the knowledge of my sector." 

"Finally, having commented and quoted the guidelines/policy, it is felt that immediate action must be taken to correct the situation," writes Guite. "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." 

Speaking with reporters later, Harper said it was "not credible" that Martin was not aware of public opinion polling being done by his staff.

"He would have been directing it," he said. 

"He seems in complete denial that this happened," said Harper. "What we're now finding out is the prime minister actually knew these process were going on in the government and he participated in it. He directed contracts, whether it was through the tendering process or outside of it, he directed contracts to political allies, and that's clear in these documents.

"I don't know how he can claim he didn't know." 

Public Works Minister Stephen Owen, who fielded reporters' questions after question period, said the documents "suggest there was some misunderstanding at the time."

"If there was confusion at that time, there isn't any further," he said. 

Owen, who only saw the documents a few minutes before speaking with reporters, said the questions about the contracts raised in Guite's memos are just "one person's opinion." 

The PM is not the only cabinet minister fingered in the memos. 

It also includes correspondence between Finance Minister Ralph Goodale -- who was minister of agriculture at the time -- and Dingwall. 

In a Mar. 25, 1995, letter to Dingwall, Goodale urged Dingwall to override existing rules for a public survey on the Western Grain Transportation Reform. 

"In order to respond to the issue in time our department will need to sole source a contract to conduct the necessary survey and analysis work amongst both the general prairie public and the farm population," Goodale wrote. 

"I wish to contract with the Earnscliffe Strategy Group to conduct this survey which will cost under $50,000."

Among the reasons Goodale felt that Earnscliffe could do the job without a tender is "the primary consultant to be involved is from Saskatchewan and has an excellent background in prairie agriculture." 

In a later letter to Goodale, Dingwall criticizes the contracting practices for public opinion research services. 

"Agriculture and Agri-food Canada officials have demonstrated a pattern of non-compliance and avoidance during the year since the Treasury Board approval of new policies concerning this type of project," he wrote. 

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