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Liberals demand apology after income trust charge 

[PoliticsWatch updated 4:45 p.m., February 15, 2007]

OTTAWA  — Liberal Leader Stephane Dion said Thursday the RCMP's laying of charges against a senior finance department official in the income trust investigation exonerates his party from insider trading allegations.

Serge Nadeau, who is a director general with the department of finance, was charged with criminal breach of trust.  

"It is alleged that he used confidential Government of Canada information for the purchase of securities which gave him a personal benefit," the RCMP said in a statement. 

The RCMP said the charges against Nadeau concludes the force's 14-month investigation. 

"The RCMP income trust investigation exonerates the Liberal Party of Canada and shows that the Conservative and NDP allegations of a politically-motivated leak were false," Dion said in a statement he read in the House of Commons foyer. 

In addition, Dion called on Prime Minister Stephen Harper to withdraw one of three French-language attack ads released this week that "smears the reputation of the Honourable Ralph Goodale," the current Liberal House leader who was finance minister when the income trust investigation was launched.  

Goodale's November 2005 announcement to lower the tax on dividend yielding stocks and keep in place the tax free status of income trusts had been the subject of allegations of insider trading by opposition parties and some Bay Street watchers.

On the day Goodale announced the changes there was a notable spike in the volume of a number of dividend-paying stocks and income trusts in the hours before the decision was made public. 

The RCMP's decision to announce a criminal investigation of the alleged leak during the federal election campaign coincided with the Liberals losing the polling lead in the race. Liberals on Parliament Hill have quietly blamed the RCMP for their election loss for the past 14 months. 

The Tories and the NDP used the RCMP investigation as a battering ram against the Liberals throughout the campaign. 

Both parties demanded Goodale resign after he was interviewed by the RCMP as part of their investigation. 

Goodale released a statement on Thursday saying the RCMP's investigation has "indicated no involvement in this matter by me, my staff or any other political person."

However, in the days following the income trust announcement, Goodale was adamant that no one from not only his staff, but from the entire finance department was involved in wrong doing. 

"There was no leak from my staff or my department, we are very careful about those things," he said on November 29, 2005. 

NDP Leader MP Judy Wasylycia-Leis released a statement on Thursday calling for Goodale to apologize. 

"Mr. Goodale owes me and everyday Canadians an apology," she said. "He repeatedly claimed there was no reason for an investigation. He was wrong. He claimed that I and the NDP were motivated merely by politics. He was wrong."

With the RCMP closing its investigation with only one individual charged, the large spike in the volume of trading in the hours before Goodale's announcement remains a question that will remain unanswered. 

"Obviously what has been alleged in the charge that's been made is not the allegation that was made in the House of Commons," Goodale told reporters after question period on Thursday. "They're two quite different things."

Finance Minister Jim Flaherty told reporters news of the charges has created "some angst" and sadness at his department. 

"This is a senior person who has been charged and it's not a happy day for the professionals at the department of finance," he said. 

However, he said there would be no apologies to Goodale from the Tories. 

"If Mr. Goodale wants an apology he should go to the RCMP," he said. 

Flaherty made a similar market-effecting income trust announcement in October, which he said only a handful of people were aware of in advance.

Nadeau was not one of those officials, according to Flaherty. 

"He was not part of the very small group of public servants and my own staff who knew I was working on the issue and was going to make an announcement. He was not part of that very tight circle."

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