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Sponsorship scandal breaks all the rules

The Story

Senior civil servants broke "just about every rule in the book," Auditor General Sheila Fraser comments in this news conference. Fraser examined three contracts worth $1.6 million awarded to Montreal-based Groupaction Marketing Inc. Between 1996 and 1999, Groupaction was contracted by Jean Chrétien's office to write three reports on ways to improve federal government's profile in Quebec after the narrow 1995 referendum results. In March 2002, newly appointed Public Works Minister Don Boudria, who inherited the sponsorship program, called for an audit after he discovered two of the three commissioned reports were virtually identical, even containing the same spelling errors. The third report was never found. Fraser describes government handling of Groupaction contracts as "appalling" and "unacceptable," and calls in the RCMP to investigate.

Medium: Television
Program: The National
Broadcast Date: May 8, 2002
Guest: Sheila Fraser
Commentator: Keith Boag
Host: Peter Mansbridge
Reporter: Christina Lawand
Duration: 5:43

Did You know?

• The sponsorship program was conceived in 1996 after the No side narrowly defeated the separatists in the 1995 Quebec Referendum. The Public Works Department was responsible for the pro-federalism advertising campaign to boost its profile in Quebec. Groupaction Marketing Inc. was one of the advertising agencies chosen for the contracts.

• The CBC's Keith Boag said the Liberals' popularity would be tested by the seven by-elections that followed Sheila Fraser's report on Groupaction contracts. The party winning anything less than seven seats in the Liberal-friendly ridings, Boag told Peter Mansbridge in this clip, could represent a backlash to the sponsorship scandal. The Liberals won just four of the seven by-elections.

• Fraser's audit of Groupaction was just the beginning of sponsorship scandal or "AdScam." The scandal involved the misuse and misdirection of millions of federal dollars that were intended to go to government advertising in Quebec. The opposition described the government sponsorship program as a vehicle to reward loyal Liberal supporters.

• The money for the Groupaction contracts came from the sponsorship program run by the Public Works Department, headed by then prime minister Jean Chrétien's Quebec lieutenant, Alfonso Gagliano. In January 2002, Chrétien appointed Gagliano as the new ambassador to Denmark. Chrétien denied the move was related to the sponsorship scandal.

• On Dec. 13, 2003, the day after Paul Martin was sworn in as the new Liberal leader and prime minister, he cancelled the entire sponsorship program.

• In February 2004, Auditor General Sheila Fraser tabled another report describing the entire sponsorship program as "scandalous" in its mishandling of millions of dollars. Fraser revealed that up to $100 million of the $250 million spent on the sponsorship program from 1996 to 2001 had been paid to advertising firms for commissions or other fees. In some cases, work was billed but not delivered.

• In February 2004, Prime Minister Paul Martin ordered an inquiry into the entire sponsorship program, appointing Justice John H. Gomery, a veteran judge of the Quebec Superior Court, to head the commission.

• On Nov. 1, 2005, Justice Gomery released the first of his two-part report on the sponsorship scandal. Gomery laid most of the blame on former prime minister Jean Chrétien and his chief of staff Jean Pelletier. The report exonerated Prime Minister Paul Martin, who had been Chrétien's minister of finance at the time of the affair.

• Gomery supported Auditor General Sheila Fraser's findings on the sponsorship program. Fraser had concluded that from 1994 to 2003, the Liberal government spent $332 million for special programs and sponsorships.

• Gomery's second report was released February 1, 2006. It recommended fixes in order to avoid such scandals in the future.


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