A former Via Rail president warned Myriam Bédard that an advertising company implicated in the federal sponsorship scandal was involved in drug dealing, the former Olympic athlete told a parliamentary committee Wednesday.

Bédard also testified that she was told Formula One driver Jacques Villeneuve had been secretly paid $12 million from the sponsorship fund to put a Canadian logo on his driving suit.

And in another unexpected claim, the gold medal-winning biathlete told the committee that her domestic partner was responsible for former prime minister Jean Chrétien's decision to keep Canada out of the war in Iraq.

Myriam Bédard testifies at the public accounts committee.
Myriam Bédard testifies at the public accounts committee.

Bédard's testimony electrified the hearings, which are looking into allegations by Auditor General Sheila Fraser that as much as $100 million distributed by the federal government's sponsorship program went to advertising companies that did little or no work for the money.

Some of that money, Fraser said, appeared to have been funneled through Crown corporations, including Via.

Via president Marc LeFrançois was fired shortly after Fraser's report was tabled in Parliament.

Bédard became one of the scandal's most prominent whistle-blowers when she alleged that Via fired her for questioning payments to Groupaction Marketing, one of the companies named by Fraser.

Via chair Jean Pelletier was himself fired after suggesting that Bédard made her claims because she was an unstable single mother.

On Wednesday, Bédard told the committee that LeFrançois warned her against questioning transactions with Groupaction because the marketing company was involved in drug trafficking.

Later, she testified, LeFrançois told her that he had said "too much" about Groupaction, and asked her to forget about their conversation.

In an interview with CBC News on Wednesday night, LeFrançois denied having ever made the allegation, and called Bédard's testimony "crazy."

"I don't want to talk about Mrs. Bédard," he said. "People will find out by themselves. Mr. [Jean] Pelletier talked once. You know what happened to him. So she was a great athlete ... and that's all I want to say."

LeFrançois said he would like to appear before the committee, but has not been invited to testify.

In a statement released Wednesday, Groupaction president Jean Brault called the drug-dealing allegation "entirely false, without any element of proof, without an iota of truth."

$12 million to Villeneuve

Bédard also testified that Groupaction paid race-car driver Villeneuve a secret fee of $12 million to wear a Canadian logo on his jumpsuit.

She said she learned of the payment in a conversation with her former agent, Jean-Marc St. Pierre.

Federal government records show that Villeneuve received $4,500 under the sponsorship program.

St. Pierre told the Globe and Mail that Bédard had either misunderstood or misrepresented their conversation.

St. Pierre said he told Bédard that it would cost a private sponsor as much as $12 million to have Villeneuve wear a logo.

However, "I swear on the Bible that I didn't say Jacques Villeneuve got secret funds of $12 million," he told the Globe.

Villeneuve could not be reached for comment, but his agent, Craig Pollock, told Montreal's La Presse that the allegation is "totally false."

"Canada has never helped Jacques in any way. In all of his career, he has never gotten anything from the Canadian government," Pollock said.

"If he's wearing a Canadian flag on his uniform, it's only to indicate his nationality."

War in Iraq

During her testimony, Bédard also made a startling claim about Canadian foreign policy when she strayed briefly from the sponsorship topic.

Bédard told committee members that her domestic partner, artist Nima Mazhari, persuaded Jean Chrétien that Canada should not participate in last year's U.S.-led invasion of Iraq.

"Ladies and gentlemen, if Canada is not involved in war, it is because Nima Mazhari gave the prime minister a lot of advice," she said.