INDEPTH: SPONSORSHIP SCANDAL
Gomery inquiry FAQs
CBC News Online | April 2005
From The National, April 13, 2005
Justice John Gomery
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You've seen Justice John Gomery and his lawyers asking questions about the sponsorship scandal. You've seen the politicians standing up on Parliament Hill.
We asked our viewers what they need to know, and we heard from a lot of you.
How much is this all going to cost?
Adrianna McMullen: My name is Adrianna McMullen. I'm in Victoria, B.C. Can you give me a breakdown of the costs involved in the sponsorship scandal investigation?
Reporter: Carolyn Dunn
Everywhere you walk at the Gomery Inquiry, you see paperwork and documentation. A multimillion-dollar mountain of files. Eighty thousand pages of evidence. Commission spokesperson François Perreault says the list is endless. "E-mails, correspondence, invoices, cheques, you know, some ... also budgets and communication plans. So we have altogether more than 550 binders of that nature."
Add to that 10 million pages of government documentation, all of it related to 98 days of hearings, well over 100 witnesses, and 16,000 pages of transcripts. In both official languages. Grand total for Justice Gomery and his staff of 28 to probe the sponsorship scandal and tell Canadians what happened: $32 million.
"It's a final figure. We'll stick to it. You may be sure that this commission pays a lot of attention to how the money is spent, actually," Perreault says.
But this commission is just the beginning of the tally of taxpayer dollars used to get to the bottom of the sponsorship scandal.
This is going to cost the federal government an additional $40 million by the end of 2006. The lion's share will come from Public Works, the department that ran the sponsorship program. It expects to spend $17.5 million in sponsorship scandal-related costs. Both the Privy Council and the Justice Department have each set aside $9.5 million, and Treasury Board will rack up $2.6 million in bills from sponsorship fallout.
Peter Desbarats was a commissioner on the Somalia inquiry, the investigation into violence against Somalis by Canadian soldiers. He says the biggest bills of all come from lawyers.
"Everybody who appears before the inquiry, or almost everybody, is under the gun, and they have a perfect right, in fact, they would be silly not to hire a lawyer," Desbarats says. "Of course, if they've been working for the government or the military or some kind of government body of some sort, then that's paid out of the public purse."
So the taxpayer will foot inquiry-related legal bills for former bureaucrat Chuck Guité, despite the fact he stands charged with fraud. Lawyers for politicians including Alfonso Gagliano and Jean Chrétien – public works minister and prime minister respectively while the sponsorship program was running – are also paid with taxpayer dollars.
All that comes to a running tally of $72 million. But there are still undisclosed costs that will trickle down to taxpayers. There's an ongoing RCMP criminal investigation and untold costs to several Crown corporations tied in with the sponsorship scandal. Many of you also asked about the cost if a snap election were forced on this issue. The answer to that: $200 million plus.
What happened to the audit of Liberal party finances?
Peter Mansbridge: A question now about what the Liberal government has been doing about this. It comes in an e-mail from Ian Skerrett. Here's what he said: "If I remember correctly, the Liberal party had arranged for an independent audit of the Liberal Party of Canada books. Whatever happened to the results of that audit and why did it not catch any of the problems recently reported?"
Our parliamentary bureau chief Keith Boag is going to help with some of these answers tonight. Was there an audit?
Keith Boag: You'd have to say no, there was no audit. What was done was that two of the most prestigious accounting firms in the country did what you would call forensic analysis of the Liberal party organization in Quebec and its relationship to the people and the companies that were identified by the auditor general in her report last year.
What they did was construct a paper trail between the party and those people.
Their documentation for this analysis came entirely from the Liberal party, and, because of that, the opposition has said that it suspects that the auditing firms or the accounting firms weren't given all of the information they really needed to get to the bottom of this.
Both those reports from the accounting firms are available on the Liberal party's website. So you can look at them for yourself, read through them. They're quite lengthy and detailed, but they're a fairly easy read and you can decide for yourself whether you believe the Liberal party has done everything it could to get to the bottom of this.
Where did the money go?
Edward Sarafin: My name is Edward Sarafin. I'm from Montreal. About the Gomery Inquiry, I would like to see an organizational chart that shows how the money goes around between one person to the other.
Reporter: Leslie McKinnon
Let's start with the money.
Let's call it the Save Canada Fund – $250 million to increase the visibility of the federal government in Quebec by placing flags and the word "Canada" at sporting and cultural events, and by promoting Canada in books and films.
The money was doled out by the Department of Public Works whose minister, Alfonso Gagliano, was also the political minister for Quebec for Prime Minister Jean Chrétien. The powerful bureaucrat in charge of the sponsorship program was Chuck Guité. The money was channelled through advertising agencies that were chosen by Guité.
Jim Travers of the Toronto Star says, "A great deal of it, it appears from the testimony in Gomery, was finding its way into the pockets of advertising firms friendly to the ruling party, and for other purposes outside of fighting separatists."
The Save Canada money was often funnelled through certain Crown corporations. There was Via Rail run by Marc Lefrançois, a good friend of a man named Jean Carle, who once worked very closely with Jean Chrétien.
In 2000, the head of Via Rail was Jean Pelletier who had been chief of staff to Prime Minister Chrétien.
There was Canada Post headed by André Ouellet, who was also once the political minister for Quebec for Jean Chrétien.
There was the Business Development Bank of Canada, which hired Jean Carle, who had worked for Jean Chrétien. The money was often handed out without written contracts and often transmitted through the advertising agencies.
One transaction prompted this exchange in French between Justice Gomery and Jean Carle:
"If this were a drug deal, it would be called money laundering, wouldn't it? It's the same principle, isn't it? Am I wrong?" Gomery asked.
"No, you aren't wrong," Carle replied.
Jean Carle's lawyer has complained about this remark by Justice Gomery.
The Save Canada money filtered down from government through the advertising agencies to the sponsored events, but it was advertising man Jean Brault, if his testimony is to be believed, who revealed how some of that money might have made its way back to the Liberal party.
Brault was owner of Groupaction, an advertising agency. He obtained about $60 million worth of sponsorship contracts from the Save Canada money through Chuck Guité and Guité's successor at Public Works, and through commissions and other means. Brault kept a lot of that money for himself, but he felt there was a price to pay.
"Despite the company's abilities, I think that our piece of the pie would have been very small," Brault testified in French.
Brault hired Alain Renaud, and paid him a million dollars over five years to be, as Brault put it, available to the Liberal party.
Brault also paid the firm owned by Jacques Corriveau, a Liberal activist and very close to Jean Chrétien, almost half a million dollars for services Brault says he didn't need.
Brault said Corriveau told him the money was for "the cause."
Brault says he also put Liberal organizers on his payroll and picked up the tab for many Liberal events.
If what he says is true, then the Save Canada money flowed from the taxpayer to the federal government, then through some Crown corporations and a handful of advertising agencies to some sponsored events. Along the way, Brault's testimony says, some of it finally washed up on the shoals of the Liberal Party of Canada.
Can witnesses be recalled?
Some of the most-watched testimony at the Gomery Inquiry came when the prime minister and the former prime minister appeared.
Bob Ralston of Guelph Ontario asks: "Would it be possible for Judge Gomery to recall Jean Chrétien and Paul Martin to the witness stand and present this new evidence to them and requestion them?"
Keith Boag: The short answer, Peter, is yes. So far, he's given no indication that he's going to recall Chrétien, Martin or anyone else, but what he has done is set aside a block of time at the end of all the testimony, but before final arguments are made, so that he can recall people. But we're going to have to wait and see whether he actually uses that time to recall people, and only then will we know who will be recalled.
What could happen to Jean Chrétien?
Nikolai Michel: My name is Nikolai Michel. I'm in Montreal. My question is will former prime minister Chrétien be held accountable if it is found he was aware of what was going on?
Reporter: Brian Stewart
It's a complex area. Justice Gomery must tread carefully. Former prime minister Jean Chrétien has memorably denied any knowledge of wrongdoing in the sponsorship matter.
Beyond that, keep in mind inquiries are not courts of law and face limitations to safeguard individual rights. They do not declare guilt or innocence. They're usually not even the final word.
In Justice Gomery's own statement "the Commission may not establish either criminal culpability or civil responsibility for sums of money lost or misspent ... It does not have the capacity nor does it intend to do so." Simply put, inquiries gather facts and report findings. But then let the chips fall where they may.
Law professor Allan Manson is co-editor of a new book on commissions of inquiry.
"It's a subtle exercise, and it's a difficult exercise because, on the one hand, you want that commissioner to make all the findings of fact necessary to fulfil the mandate, but they can't cross the line to translate those findings of fact into legal conclusions of criminal or civil responsibility," Manson says.
"The central feature of this kind of commission is fact-finding, and fact-finding can lead to findings of misconduct. It can lead to findings that people were subject to a particular standard of conduct and that they failed to meet that standard. What the commission cannot do is reach legal conclusions about responsibility. In other words, the commission cannot say someone committed this crime or that crime or someone was negligent in a civil sense. That is for the judicial system."
Now, where Justice Gomery can hold people responsible or accountable is in the realm of politics and ethics.
Political scientist David Shugarman notes inquiries don't always have clean endings. Those criticized can fight back.
"Gomery can find that former prime minister Chrétien should have known what was going on. I mean, after all, there is the notion that the buck stops somewhere," Shugarman says.
"An inquiry comes down, and people who feel aggrieved or that they have been somehow named for being responsible, i.e., irresponsible, they will say he didn't get it right or he overemphasized something and there's more to it than that. One has to then just hope that the Gomery commission doesn't leave anything uncovered, that they do the job."
Little about this inquiry suggests recriminations are going to end any time soon.
Could there be a class-action lawsuit against those involved?
Peter Callal-Gorge: My name is Peter Callal-Gorge and I live in Winnipeg. Since Canadians are the main shareholders in Canada, wouldn't it be possible for a public-minded lawyer to bring a class-action lawsuit against the Liberal party and its senior executives? That way we could recover some of the stolen money with interest and perhaps seek some punitive damages.
Peter Mansbridge: Well, we went to a lawyer for the answer to this question. Bonnie Tough is a specialist in civil litigation.
Bonnie Tough: Taxpayers are not shareholders, and they do not have the same rights as shareholders. The taxpayers pays their taxes, and the government of Canada sets the priorities and policies for use of those monies. In this case, the government has indicated that it will pursue anyone found to have wrongfully obtained funds, and that is what we would expect in the normal course. The question of whether or not an individual or a class of individuals could bring an action has some legal obstacles, but it has some practical obstacles, as well. It is unlikely, in the absence of a criminal conviction, that any taxpayer or their lawyer, or class of taxpayers, would have the financial resources to pursue such a claim.
Will the inquiry continue if there is an election?
Peter Mansbridge: Our next question comes in an e-mail from John Twigg in Campbell River, B.C. He says, "Why can't Judge Gomery keep hearing new testimony if an election is called?"
Christina Lawand is covering the Gomery Inquiry for us.
Christina Lawand: There's been a lot of rumours to that effect, but Judge Gomery has been quite clear on this, that election or no election, he will keep hearing witnesses. Now the inquiry is by law completely independent from Parliament. It has its own budget. It has its own timetable. So even if the government falls, this inquiry marches on.
Peter Mansbridge: So there's no way then the inquiry will stop if there's an election campaign soon.
Christina Lawand: Actually, there is one way, by law again, and that would be if the cabinet, in this case Paul Martin's cabinet, passes what's known as an order-in-council, but you could just imagine the optics of this. A Liberal government pulling the plug on an inquiry that's investigating allegations of Liberal corruption – Canadians would be outraged, probably more scandalized than they already are. It's why Paul Martin is not even considering this option for now.
Why is the scandal concentrating on Quebec?
Peter Mansbridge: Moving on to our next question, it comes from Roberts Creek in British Columbia. Pierre Rousseau wants to know, "Why is the actual scandal only focusing on Quebec issues and the sponsorship program?"
Reporter: Lynne Robson
Quebecers love a festival, from the rodeo in St-Tite to sand castles on Île-de-la-Madeleine. You name it, there's a festival for it. In this festival culture lie the roots of the sponsorship scandal. Only in Quebec, says Pierre Parent of P2P marketing, are festivals the ideal way to communicate with consumers.
"And the festival is a big part of Quebec's culture. We've been celebrating all the time, and again there's so many of them, it's just a reflection of, you know, the way we are. So using the festivals is typically a very, very good way again to get closer to the consumer," Parent says.
So after the 1995 referendum ended in near disaster for the federal government, it set up the sponsorship program to win back the hearts of Quebecers. It spent millions sponsoring local events, especially festivals. Then there were flags, lots of Canadian flags. For a while, it worked.
"What we saw at the time is that the visibility of the Canadian flag went up over several years there after the referendum, and the PQ, quite understandably, noticed that and were bothered by it," says Karl Moore of McGill University.
The program was launched in 1997, and, while many people think of it as an only-in-Quebec program, it was not. Some of the sponsorship money was spent in other provinces, in Nova Scotia refitting the Bluenose II, and in Manitoba supporting the Pan Am games. But the vast majority of the sponsorship money was spent in Quebec. It was only when the auditor general released her report that the scope of the scandal was clear. Since then, Quebec has been painted by some as a province more inclined to political intrigue, but this historian says corruption is not a made-in-Quebec phenomenon.
Antonia Majoni of the McGill Institute for the study of Canada says, "We've seen scandals in practically every province, and, in effect, Quebec was one of the provinces that cleaned up its political system much farther and much faster than most of the other provinces."
Still, Quebec agencies say they feel under suspicion and, worse, says Parent, the scandal has divided Quebecers again.
"This is really sad because again, you know, we're talking about two communities, and we've been trying to, you know, blend into one big country, and this is not going to help it," Parent says.
Moore says the sponsorship program was a good plan gone bad. "We're back to where separatism is more of a threat now."
A program designed to save the country backfired, says Moore, and that could happen only in Quebec.
Will anyone go to jail?
Peter Mansbridge: Another legal question now. It comes from Douglas McLaughlin in Chatham, Ont. "I would like to know if any of those involved will go to jail if convicted of fraud." Well, certainly a question for someone who knows the law. Sanjeev Anand is a professor of criminal law at the University of Alberta. Professor, a conviction on fraud, does that mean jail time?
Sanjeev Anand: Not necessarily. The fraud provisions in the Criminal Code call for a maximum term of imprisonment of 10 years. There's no minimum term of imprisonment.
Quite frankly, hardly anyone ever gets the maximum term. You have to have a horrendous criminal record, have committed a fraud involving millions of dollars before you're going to be getting anything approaching that maximum sort of jail term.
If a judge determines, in his or her discretion, the individual before him who's committed the fraud only warrants non-penitentiary time, two years less a day, in jail, that person may even get what we call a conditional sentence. That's a sentence served in the community. Typically what we'd normally call house arrest. The person stays at home, maybe goes out to do some community service hours under a strict curfew.
So it's very possible for someone who's been convicted of fraud, who has no previous criminal record and doesn't pose a risk to the public while on that conditional sentence, to be given a community-based disposition, a conditional sentence as opposed to going to jail.
Will the money be recovered?
Peter Mansbridge: One last question. It comes from Deborah Crawford in Chilliwack, B.C. "Will there be an attempt to recover the money?" In fact, that's already underway, and our parliamentary bureau chief can tell us about it. Keith?
Keith Boag: The government announced earlier in March that it had launched a lawsuit seeking to recover $41 million principally from people who are associated with the ad agencies that were named in the auditor general's report.
At the same time, the minister for public works said that further investigation may lead the government to seek even more money, perhaps more than $90 million. It's also interesting to note that some of the people named in the lawsuit, Jean Brault for instance, whose testimony last week really blew the lid off this whole thing, some of those people like him are also those facing criminal charges for fraud.
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Gilles Duceppe's response (RealVideo runs 5:59)
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