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Former prime minister Jean Chrétien makes a point with a golf ball during his testimony at the Gomery commission in 2005. ((Jonathan Hayward/Canadian Press))

Justice John Gomery's finding three years ago that former prime minister Jean Chrétien and his chief of staff shared some responsibility for the federal sponsorship scandal has been struck down by the Federal Court.

Judge Max Teitelbaum ruled Thursday there was an appearance of bias in Gomery's 2005 report. He rejected the part of the report that said Chrétien and Jean Pelletier had erred in their oversight of the sponsorship program.

Teitelbaum also sharply criticized Gomery's behaviour, saying he prejudged situations, was not impartial and was preoccupied with the media.

He said Gomery made "inappropriate and ill-advised comments," including the statement that Chrétien's handing out of golf balls emblazoned with his name was "small-town cheap."

That had a detrimental effect on the fairness of the hearings into the sponsorship affair, because the public could conclude that Gomery had prejudged the issues he was supposed to investigate, Teitelbaum said.

"After reviewing the evidence placed before me on this issue, I am convinced that there is more than sufficient evidence to find that an informed person, viewing the matter realistically and practically and having thought the matter through would find a reasonable apprehension of bias on the part of the Commissioner," Teitelbaum wrote in his decision.

"The comments made by the Commissioner, viewed cumulatively, not only indicate that he prejudged issues but also that he was not impartial toward the Applicant."

Chrétien 'totally vindicated': aide

Gomery said Thursday he did not consider himself to have been biased in any way.

"When you're seriously criticized by a judge who points out errors and inappropriate comments that you made, it's not pleasant — to read about the mistakes that you have made or might have made," Gomery told CBC News. 'It is particularly disappointing that I am held to be, appear to be, a biased judge."

CBC’s Rosemary Barton says Gomery is anxious to clear his name and is looking to the Harper government to see whether an appeal might be filed to Thursday’s court decision.

Lawyers and advisors to Chrétien meanwhile welcomed the court decisions and said they had totally vindicated the two applicants.

Eddie Goldenberg, a close aide to Chrétien for many years, said he'd spoken to the former prime minister and he was very happy, especially for Pelletier, who is suffering from cancer.

"The Gomery inquiry was public money poorly spent," Goldenberg said

Its conclusions had done damage to the cause of Canadian unity in Quebec, the reputations of two dedicated public servants and to the Liberal Party of Canada, he added.

He called on Chrétien's successor as prime minister, Paul Martin, who set up the Gomery commission, to apologize to Pelletier for the impact the affair had on his health.

"Life is too short to bear grudges forever, I hope that Mr. Martin will demonstrate the grace that I know he has, the class and decency that we know he has, and apologize publicly to Mr. Pelletier," Goldenberg said.

About $1.1 million of federal money that was supposed to have been spent fighting separatism in Quebec through sponsorships of popular events was diverted to the Quebec arm of the Liberal party.

Sponsorship scandal cost Liberals election

Gomery's final report in 2005 did not  say Chrétien and Pelletier were involved in the kickbacks, but the two appealed to the court, claiming bias and unfairness.

The sponsorship scandal gained prominence in 2004 after Auditor General Sheila Fraser released a report on the government's $250-million advertising campaign against Quebec separatism in the 1990s.

In her February 2004 report, Fraser said an estimated $100 million in commissions went to Liberal-friendly ad agencies for little or no work.

The Conservatives used the findings to campaign against the Liberals, before emerging victorious in the January 2006 federal election.