INDEPTH: SPONSORSHIP SCANDAL
Gomery Inquiry 2004 testimony
CBC News Online | Updated February 4, 2005
Week of Dec. 13, 2004:
Robert Scully, producer of a television series about hockey legend Maurice Richard, testifies that four advertising agencies that charged Ottawa more than $350,000 did no work for the series. He tells the inquiry that "I nearly fell off my chair," when he heard how much the ad firms were getting.
Week of Nov. 22, 2004:
Justice Gomery rules that key witness Chuck Guité cannot be asked questions about his testimony at last year's parliamentary inquiry, despite what some lawyers say are glaring contradictions.
Guité testifies that the Prime Minister's Office accepted free VIP passes worth thousands of dollars to the Montreal Grand Prix, an event the government sponsored. Guité says this proves his superiors were making important decisions about the program.
Ran Quail, former deputy minister of public works, testifies that he was happy to let Alfonso Gagliano or Jean Pelletier, then Jean Chrétien's chief of staff, chose which sponsorship projects to fund. Quail's testimony backs up Guité's claims that senior Liberal officials had the final say on which ad companies received sponsorship money.
Justice Gomery criticizes Quail for having promoted Guité in 1996 despite an audit of the sponsorship program that revealed numerous problems, including backdated contracts, evidence of favouritism and lack of proper documents.
"All the red flags were there," Gomery says.
Quail says Guité promised he would follow the rules and make necessary changes.
"I operated on the basis of really believing what people said," Quail testifies.
Week of Nov. 15, 2004:
A panel of MPs recommends that Guité should not be asked questions about his testimony at the parliamentary inquiry.
Week of Nov. 8, 2004:
Former sponsorship program head Chuck Guité testifies that he never checked whether ad agencies were fulfilling their contract terms or overbilling the government. "There was a contract in place, I got an invoice … I signed the invoice, it was paid," he says. "The system was in place to do it that way," he says.
The hearings go into recess until Nov. 22.
Lawyers for Alfonso Gagliano say they want Guité's parliamentary privilege revoked so they can question him on discrepancies between his testimony at the public inquiry and his testimony at last year's parliamentary inquiry.
Week of Nov. 1, 2004:
David Myer, a bureaucrat who would run the sponsorship program while Chuck Guité was travelling or on sick leave, admits he never made sure the $24 million in contracts he approved were in order. Myer testifies that he assumed rules were being followed and signed documents to "keep the paper flowing."
Mario Parent, who worked for Guité, testifies that he did what he was told on sponsorship projects because he was afraid for his job. He says he never refused to sign paperwork, even where he had questions, because he saw that another bureaucrat nearly lost his job for challenging Guité.
Guité, who ran the sponsorship program from 1996 to 1999, begins an expected four days of testimony.
Guité testifies that he reported "administratively" to the deputy minister for public works. "Functionally, I reported through either Canada Information Office, PCO [Privy Council Office] or dealt directly with the minister's [Alfonso Gagliano's] office," he says.
Guité testifies that there were no written guidelines on how to approve sponsorship applications, and the normal contracting process was never used when awarding contracts. "We qualified agencies for sponsorship, and after that there was not a competition for every individual sponsorship event, no," he says.
Week of Oct. 25, 2004:
Justice John Gomery says his job would be easier if members of Parliament who testified before the House of Commons public accounts committee would waive their parliamentary privilege. The privilege means MPs are protected "from any action or libel, as well as from any question or molestation," so MPs can't be asked about their testimony before the committee. Lawyers for the House of Commons say only the House as a whole can waive the privilege, not individual MPs.
Gomery rules that Chuck Guité must testify in public, saying there's no evidence that the testimony would prejudice Guité's upcoming trial on fraud charges related to his role in the program.
Week of Oct. 18, 2004:
Joanne Bouvier, a former assistant to Alfonso Gagliano, testifies that Jean-Marc Bard, then Gagliano's chief of staff, controlled much of what happened in the sponsorship program. Bouvier says Bard would make decisions on which sporting and cultural events would get money and how much, and would sometimes choose which ad company would get the contract.
Bouvier says she was told not to scan any of the proposals into the government's electronic document tracking system, and not to write Bard's decisions on any of the files, but instead to read them over the telephone directly to bureaucrats at the sponsorship program. She also testifies that Bard would make sure proposals from Liberal MPs received priority over those from members of other parties.
Isabelle Roy, a former assistant to Gagliano, testifies that Pierre Tremblay, who ran the sponsorship program from 1999 to 2001, had a drinking problem. Gagliano's lawyer suggests that others had to do Tremblay's work because he was unable.
Ghislaine Ippersiel, who served as personal assistant to Jean-Marc Bard, testifies that Bard spoke frequently to senior executives in advertising agencies involved in the sponsorship program, "sometimes twice a week."
Ippersiel recalls that Bard ordered her to "clean up" files on the sponsorship program the day before Gagliano was shuffled out of cabinet. She testifies that she and two other members of the staff went through more than 1,100 documents to remove handwritten notes and stickies, where instructions on which proposals to accept and how much many to give them were written. Gomery says he's never heard of such a thing happening in the private sector. Ippersiel replies that, among federal ministers, "I must say this is standard practice."
Evelyn Marcoux, who spent six months in Chuck Guité's branch at Public Works in 1998, testifies there were no formal guidelines for awarding contracts. She says she had to tell people their requests for money had been denied and could never tell them why. She said she was removed from the sponsorship program when she tried to introduce reforms to the process.
Week of Oct. 11, 2004:
An advertising invoice from Publicité Dezert is entered into evidence and shows that in 1997 Ottawa paid more than $100,000 for souvenirs, including Christmas ornaments and golf balls. Another invoice for similar knick-knacks totals more than $600,000. Publicité Dezert is owned by Eric Lafleur, son of Jean Lafleur of Lafleur Communications. Both father and son charged fees and commissions on the transactions of $100,000.
Huguette Tremblay, former office manager for the sponsorship program, testifies that the government used to deal directly with suppliers for such souvenirs, and would pay less. Tremblay's notes from the time are entered into evidence and suggest the souvenir golf balls, marked with then Prime Minister Jean Chrétien's signature, were sent directly to his office.
Notes written in 1999 by an assistant to then Public Works Minister Alfonso Gagliano show that "Paul Martin's office called to find out why Les Internationaux du Sport de Montreal, never got an answer, to their request for sponsorship money." One month after that communication, Les Internationaux du Sport de Montreal, a non-profit group run by Paul Martin supporter Serge Savard, received $250,000 in federal money.
Isabelle Roy, a former aide to Gagliano, testifies that files relating to the sponsorship program were not kept in the minister's regular filing system or database. The files were sent directly to Chuck Guité's office by messenger, she says, so they could not be traced to Gagliano's office. She says the confidential treatment of the sponsorship program was "the way cabinet wanted it." She also testifies that supporters of the Liberal party were more likely to have their sponsorship requests accepted.
Week of Oct. 4, 2004:
Documents released at the inquiry show that Lafleur Communication used federal money to rent a $100,000 luxury suite at the Bell Centre, home of the Montreal Canadiens, as part of a $400,000 federal sponsorship of the team. Other documents show sponsorship money went to provide $65,000 worth of promotional items, including 300 golf balls monogrammed with the initials "J.C."
Documents show Media Vision IDA, a Montreal ad agency, donated $5,000 to the Liberal party out of the same bank account it used for money received from the sponsorship program.
Deputy Finance Minister Kevin Lynch testifies that Paul Martin, when he was finance minister under Jean Chrétien, would have known about a special fund created to support national unity projects. Lynch says there's nothing to prove Martin was involved in allocating money from the fund, though. Justice John Gomery asks Lynch to go through the records of Treasury Board meetings and find out more about Martin's role.
Pierre Tremblay, who ran the sponsorship program from 1999 to 2001 and was scheduled to testify this week, dies after a long illness. The inquiry accepts as evidence transcripts of Tremblay's testimony from last year to a three-member panel appointed by the Public Works Department. In 2003, Tremblay testified that Alfonso Gagliano knew how money was being spent on the sponsorship program and that he met with Gagliano or his deputy regularly. Justice Gomery says the transcripts must be treated with caution because Tremblay cannot be cross-examined.
Week of Sept. 27, 2004:
Alex Himelfarb, the clerk of the Privy Council and Canada's top civil servant, testifies that former prime minister Jean Chrétien isn't legally accountable for the sponsorship program. He says even though Chrétien signed the first requests to get the program started, the minister of public works is accountable.
For nearly an hour, Peter Doody, Chrétien's lawyer at the inquiry, reads selected passages from newly released cabinet documents from 1996, describing what the cabinet said was a need to fight separatism with a program promoting Canadian unity. Justice John Gomery becomes frustrated because Doody isn't asking questions of any witnesses, and accuses him of distorting evidence and attempting to plead Chrétien's case to the public.
An audit of the sponsorship program by Ernst and Young from 1996 is produced at the inquiry. The draft version of the audit said there were recurring problems with the program and warned of possible legal action if they were not corrected. The final report had all those warnings removed and said rules were generally being following in the program. "Why were [the warnings] dropped?" asked inquiry co-counsel Neil Finkelstein. "I do not recall," said Deanne Monaghan of Ernst and Young.
Week of Sept. 20, 2004:
In an e-mail dated June 1999 produced at the inquiry, Michael Colcott of the Treasury Board Secretariat complained about his "wretched experiences" with Groupaction and asked why Ottawa was "continuing a major contract with an incompetent supplier." The e-mail shows federal officials knew there were problems with the sponsorship program five years before the 2004 auditor general report.
Guy Pratte, lawyer for Jean Pelletier, Jean Chrétien's former chief of staff, argues that the goal of the sponsorship program was to save Canada and it was legitimate for Pelletier to play a role in directing the Quebec-based program.
Justice Gomery calls the process Ottawa used to fire advertising firms "arbitrary." Gomery says the selection of such firms as Groupaction, Lafleur Communication and Groupe Everest was not done fairly or openly.
In their questioning of Deputy Public Works Minister David Marshall, lawyers for Chuck Guité and Alfonso Gagliano try to paint their respective clients as conscientious public servants and to distance them from the scandal.
Week of Sept. 13, 2004:
Inquiry head Justice John Gomery rules that lawyers for the Liberal party will not have standing at the inquiry. They will not be able to cross-examine inquiry witnesses, but can monitor the proceedings.
A tabled memo, written in 1997 to then prime minister Jean Chrétien by the clerk of the Privy Council, says Chrétien would be directly accountable for money spent in the sponsorship program. Chrétien had signed documents authorizing sponsorship spending.
"By signing this submission in the way he did, the prime minister is responsible for the expenditures that are made in relation to the sponsorship, and that includes the choosing of the activities," says Neil Finklestein, co-council for the public inquiry.
A memo tabled at the inquiry suggests Chuck Guité was handpicked to head the sponsorship program. The memo was written by the chief of staff of then public works minister David Dingwall.
Sheila Fraser (CP Photo)
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Week of Sept. 6, 2004:
Auditor General Sheila Fraser testifies that the federal sponsorship program ran from 1997 to 2001 without ever being mentioned in the annual performance reviews of the Department of Public Works. "Parliament was never informed that the government was carrying on sponsorship activities," says Fraser.
Pierre Fournier, a lawyer for former public works minister Alfonso Gagliano, cross-examines Fraser and suggests she lost sight of the main goal of the sponsorship program: national unity. "We are not auditing a national-unity strategy," Fraser replies. "We audit management issues. We do not audit policy, and we do not comment on policy."
John Campion, a lawyer representing Via Rail, argues that Fraser could have challenged the Crown corporation's participation in the sponsorship program in 1999, when she reviewed Via's books. Fraser testifies that there was no way she could have known about the scope of the sponsorship program until her department's review in 2003.
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Gilles Duceppe's response (RealVideo runs 5:59)
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