Sponsorship program set Bluenose funding adrift

About $2 million intended for the schooner Bluenose II went missing after it was directed through a Montreal ad agency.

About $2 million intended for the famed schooner Bluenose II went missing after it was directed through a Montreal ad agency, Public Works Minister Stephen Owen said Monday.

"We're tracing funds that may have gone adrift, and we will be getting them back," Owen told the House of Commons.

The controversy is over a $2.3-million grant that was routed through Lafleur Communications under the federal government's scandal-plagued sponsorship program.

The trust that operates the Nova Scotia-based schooner says it received about $450,000 in 1997 from Lafleur. However it is unclear if that money came from the $2.3 million grant or another source.

The government has already taken legal action against a number of advertising companies to recover money it says was misdirected through the funding program.

Owen said the government would add the Bluenose account to that list.

"We're looking to the Bluenose foundation to bring forward as many details as they can to us, to support us in that litigation," he said outside the House.

Owen added that the RCMP could be asked to investigate the Bluenose deal if there are "reasonable grounds to suspect that a criminal offence has been committed."

Auditor General Sheila Fraser has estimated that as much as $100 million was misspent through the federal sponsorship program.

Much of that money appears to have been paid to Liberal-friendly advertising agencies that took big commissions for simply passing along the money.