The NDP accused Treasury Board President Tony Clement Monday of using the G8 legacy project cash as an "elaborate slush fund" and deliberately trying to avoid scrutiny from the auditor general.

The party's ethics critic, Charlie Angus, held a news conference in Ottawa where he said the NDP obtained documents that show the $50-million fund was able to avoid normal checks and balances because of how Clement set it up.

"In fact, it appears that this slush fund was set up in such a way that it kept both the Canadian public and the auditor general in the dark," said Angus.

The G8 Legacy Infrastructure Fund allowed Huntsville, Ont., where the G8 meeting was held in June 2010, and neighbouring towns in the Muskoka region to access federal funding for new and improved infrastructure. Signage, lighting, streetscaping, benches, community centre renovations, improved roads and parks, public washrooms and gazebos were among the 32 projects chosen.

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The fund has been an ongoing source of controversy, particularly since the spring, when acting auditor general John Wiersema released his office's much-anticipated report on how it was administered.

The report said Foreign Affairs Minister John Baird, who was infrastructure minister during the G8 meeting, approved the projects based on the advice of Clement and that no public servants were involved in the decision-making process.

Normally bureaucrats evaluate project proposals, forward recommendations to their ministers, and the ministers make the final decisions. Wiersema said that process wasn't followed.

Wiersema said it was also troubling that his office could find no paper trail to show what criteria were used to select the winning projects from the ones proposed by various municipalities.

The NDP says Clement, who was industry minister at the time and is the MP for the Muskoka region where the G8 meeting was held, went to "elaborate lengths" to set up a system where the funding proposals were shuffled through his constituency office first before the federal departments that were in charge of the G8 and G20 meetings.

Clement "bypassed bureaucracy"

Angus suggested that by doing this, Clement was able to avoid scrutiny from the auditor general.

"Because Minister Clement used his constituency office, this wasn't subject to the normal channels of review," said Angus. "The use of a constituency office to funnel money is very disturbing. It smacks of the creation of a personal private fiefdom where taxpayers' money becomes pocket change for Tony Clement to give out. That's a very disturbing process if we allow this."

A spokeswoman from Clement's office called Angus's comments an unfounded attack.

"There is nothing new in these allegations," Heather Hume said in a statement. "All information was made available to the auditor general."

"The auditor general made recommendations to improve the administrative process. We appreciate these recommendations and will improve the process in the future."

The NDP obtained the documents through freedom of information laws from the Huntsville and Bracebridge municipal governments. Angus said the documents were beyond the auditor general's reach. The auditor general only has the authority to access federal departments, not local governments, and Angus suggested Clement "bypassed bureaucracy" by running the fund through his local office.


The NDP said Monday it has documents that raise questions about Treasury Board President Tony Clement's involvement in selecting projects under the $50-million G8 legacy infrastructure fund. (Adrian Wyld/Canadian Press)

"This is the paper trail. This is the paper trail he ran through his office so that the auditor general wasn't able to see this," Angus said, holding up one of the documents.

The documents contain a project proposal form that municipalities filled out describing the project they wanted funded, and they were asked to send the form to Clement's constituency manager, Sondra Read.

There is also a document that is an email from Read to the town mayors that indicates certain kinds of projects were more likely to get funding. Read said she had been asked to put a call out for proposals that were specific to the enhancement of downtown areas.

"We are looking for storefront renovations, roadwork, landscaping and general beautification, lighting, signage, anything that will enhance and is specific to the downtown area," she wrote.

Bureaucrats did attend G8 meetings

Angus said the documents also show that bureaucrats from several different departments did attend various meetings with Clement and other local officials. That raises questions about why the auditor general concluded there was no involvement from bureaucrats.

"The auditor general asked the right questions but there was obviously a system in place that prevented the auditor general from getting to the bottom of it," said Angus.

The NDP MP said if the G8 legacy fund wasn't a slush fund, the bureaucrats should have said clearly what they knew about it. "Why didn't the bureaucrats say they were involved?" Angus said.

He did not accuse them of misleading the auditor general, however. Instead, Angus said the responsibility lies with Clement and Prime Minister Stephen Harper to clear up the confusion.

"I'm asking the prime minister and the government of Canada to explain, the Conservative government, how is it that all these key officials were not forthcoming to the auditor general," he said.

The auditor general's report also had determined that the government decided to put funding for the G8 infrastructure projects under the existing Border Infrastructure Fund, but didn't inform Parliament of that decision. When MPs approved $83 million for the border congestion fund, they didn't know $50 million of it would be diverted to pay for 32 infrastructure projects.

"Minister Clement needs to start being honest with the Canadian people," said Angus. "Because up to now the code of silence has protected him, and the rest of this government for what they've managed to get away with."

Clement and Baird defended their roles in the fund following the auditor general's report. They said every penny was accounted for, although they acknowledged they could have done better to be more transparent about the process.

Angus said he would like to see a House of Commons committee hold hearings in the fall about the G8 legacy fund. The auditor general, however, said it won't be taking any further steps.

"The Office of the Auditor General has the authority to request documentation for funding of federal public money. We asked for documentation, but we were not provided with any. Deputy ministers signed off on the accuracy of facts in the chapter. We have no plans to reopen the file," a spokesman for Wiersema said in a statement to CBC News.

A statement from the Liberal Party urges Wiersema to reconsider his decision and conduct a full value-for-money audit of the G8 Legacy Fund.

"The information revealed today raises new and additional questions about long-standing concerns with Tony Clement and how his staff doled out the G8 Legacy Fund," Liberal critic for government operations John McCallum said in the statement.