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Legacy of Waste During Chrétien-Martin Years

One Report for the Price of Three

2nd Session, 37th Parliament,
Volume 140, Issue 52

Tuesday, May 6, 2003

On the Order:

Resuming debate on the inquiry of the Honourable Senator LeBreton calling the attention of the Senate to the legacy of waste during the Martin-Chrétien years.—(Honourable Senator Eyton).


Hon. W. David Angus: Honourable senators, I am pleased to join the debate on the inquiry launched by Senator LeBreton into the legacy of waste during the Martin-Chrétien years. Honourable senators, we have in recent weeks heard from 11 of our colleagues on this side: Senator Bolduc, Senator Buchanan, Senator Comeau, Senator Di Nino, Senator Gustafson, Senator LeBreton, Senator Oliver, Senator Stratton, Senator Forrestall, Senator Nolin and Senator Kelleher.
 

We have heard from them a series of chilling illustrations of the abominable wastage of millions, perhaps even billions, of Canadians' hard-earned tax dollars during the Martin-Chrétien years. As well, in the context of these illustrations, we heard repeatedly very disturbing examples of outright Liberal government arrogance and stonewalling in their refusal to acknowledge or in any way to be accountable for this disgraceful and, in some cases, even criminal behaviour. Honourable senators, there is more to come; more, more and more scandalous stories that together weave a fabric depicting the horrendous legacy of waste that characterizes the Martin-Chrétien years.

Honourable senators, I was planning to devote all of my time this afternoon to the government's flagrant abuse of its so-called sponsorship program, particularly what has become known as the Groupaction scandal. However, honourable senators, we have received new revelations on what I respectfully submit is the mother of all scandals and abuses perpetrated during these pitiful Martin-Chrétien years. I speak of the infamous "Airbus Affair'' in which former Prime Minister Brian Mulroney and his family were shamelessly, perniciously, publicly and unjustly persecuted over an eight-year period during an RCMP investigation initiated at the behest of officials of the Liberal government.

Notwithstanding Mr. Mulroney's successful defamation suit against the government and the RCMP, the Chrétien team has steadfastly and arrogantly refused to make a fulsome apology to the former Prime Minister and his family or to acknowledge publicly that the investigation was politically motivated. Rather, they caused the RCMP investigation to continue unabated for six more years after the settlement of the litigation was finalized, the whole causing substantial further chagrin, heartache and embarrassment to the Mulroney family and more totally unjustified and damaging gossip, rumours and speculation in the media, to say nothing of running up huge, additional, unjustified costs and expenses for the poor taxpayers.

Then suddenly on April 22, just two weeks ago, the once proud and internationally respected RCMP issued a terse press release announcing that at long last the Airbus investigation was closed, that no evidence of wrongdoing had been uncovered and that no charges would be laid. All of this came after an eight-year investigation costing taxpayers a reported $50 million over and above the cost of defending the Mulroney's lawsuit, which is estimated to be in the area of $11 million. It this not yet another shocking example of abuse and misuse of taxpayers' dollars? You bet it is, honourable senators, an absolutely classic example of the deplorable legacy of waste of the Martin-Chrétien years.

We are given to understand that it was Allan Rock, then Justice Minister, who initiated this horrendous "witch hunt'' by forwarding "rumours'' to the Solicitor General and thence to the RCMP, that bribes had been paid in connection with Air Canada's purchase of 34 Airbus A320 airplanes at a cost of $1.8 billion. These rumours, we understand, were started or fed by a certain overzealous journalist who harboured a strong personal dislike of Mr. Mulroney and his family.

Mr. Rock was also the minister whose subordinates in the Department of Justice later dispatched the shocking Kimberly Prost/Fraser Fiegenwald letter of September 29, 1995 requesting investigative assistance from the Swiss government. This letter contained the incredible sentence:

This investigation is of special importance to the Canadian government because criminal activities carried out by the former Prime Minister are involved.

Later, during proceedings in the Mulroney lawsuit, we learned the equally shocking fact that the Commissioner of the RCMP had never read the said letter, as late as two years after the fact. Honourable senators, what a dismal day for justice and fair play in Canada.

The London Free Press reported on April 29, 2003:

Whether a man is popular or reviled, the rules of natural justice apply; the point about basic rules of fairness is they apply to all. And the way Mulroney out of office was treated by the Chrétien government was shameful. Proof of this was the statement made April 23rd by assistant RCMP Commissioner Bill Lenton. Lenton announced that the eight-year, multi-million dollar RCMP investigation of the so-called "Airbus'' affair was over... "there are no more leads to follow and nothing more to substantiate the allegations that were originally levied; it is incumbent upon us to stop the investigation, which we have done''...Guess what, it turned out there were no criminal activities. There were no facts. Outside the fevered imaginations of some so-called "investigative journalists'', there was nothing that would stand up to scrutiny in a law court. And the RCMP finally admitted that.

The London Free Press article continued:

Almost as disturbing as the way the Justice Department initiated, and the RCMP handled, the investigation, is the lack of political accountability. To date, no politician has resigned over this gross abuse of power. If the Airbus saga warrants any conclusion, it is the danger posed to citizens by a government out of control. The Justice Department did not determine the accuracy of its information before libelling a former Prime Minister. The RCMP spent millions on a fruitless investigation.

Honourable senators, the investigation into the "Airbus Affair'' may have ended but the most important questions remain unanswered. How was this travesty of justice ever allowed to occur? How much longer will Canadians tolerate the unaccountable abuse of their trust by the Chrétien government? Who will be made accountable for putting Brian Mulroney and his entire family through such unconscionable turmoil for the past eight years? Who will answer to Canadian taxpayers for the millions wasted? As we have seen since the beginning of the tacky Liberal administration in 1993, the answer is: Nobody. This government's legacy is clearly one of sleaze, arrogance and abusive waste.

The arrogant attitude surfaced in this chamber on April 29, 2003. When asked very politely by Senator Tkachuk when this government would issue a formal apology to all those wrongly and very publicly publicized as being involved in this misadventure, the Leader of the Government in the Senate responded, three times, I believe, by saying, "...this investigation was directed by the RCMP. If the honourable senator has questions to the RCMP, I would suggest that he address them to that body.'' Perhaps Senator Tkachuk does not wish to wait eight years for a "nothing'' RCMP response. He wants and he deserves to know when this government will do the right thing and apologize, as do all Canadians, honourable senators.

[Translation]

Honourable senators, I would now like to deal with the sponsorship program. This Liberal program was created by former Public Works Minister Alfonso Gagliano after the close referendum on Quebec sovereignty in 1995.

According to the Liberals, its purpose was to increase federal government visibility in the provinces.

[English]

This is another scandalous situation — one in which the RCMP is again involved, albeit this time for the right reasons. The key is: When will the RCMP complete its criminal investigation commenced one year ago and, if warranted, take the appropriate steps against the guilty parties in consequence of their findings? Hopefully we will not have to wait eight years for this. The program was established in 1997, allegedly to support sporting, cultural and community activities in all regions of Canada, and to encourage a positive perception of the federal government and to increase its presence and visibility in communities across our land through the use of the Canada Brand at events and on promotional material. In theory, this $40 million-a-year program sounded like a darn good idea. Unfortunately, it has been knee-deep in scandal and controversy almost since its inception.

(1620)

Some of the most controversial contracts given out under the program involved a Montreal-based communication or marketing agency called Groupaction, a known friend and supporter of the Liberal Party of Canada. Between 1996 and 1999, Groupaction was awarded three contracts valued respectively at $500,000, $550,000 and $575,000. In March of 2002, this sponsorship program blew up in the government's face, following reports in the media and questions in the House of Commons and here in the Senate. Important concerns were raised about the program's inefficiencies and obvious examples of wasteful spending. Groupaction was caught four-square in the middle of all this controversy. After increased pressure from the media, the public and parliamentarians, the then-minister of Public Works, Don Boudria, was forced to ask the Auditor General to conduct a special audit into the three Groupaction sponsorship contracts.

The Auditor General, Ms. Sheila Fraser, agreed to the special audit. A few months later, on May 8, 2002, she tabled an extensive report in the House of Commons. She did not mince her words. She stated:

Our audit found that senior public servants responsible for managing the contracts demonstrated an appalling disregard for the Financial Administration Act, the Government Contracts Regulations, Treasury Board policy, and rules designed to ensure prudence and probity in government and procurement.... The government files on the three contracts are so poorly documented that many key questions remain unanswered surrounding the selection of the contractor and the basis for establishing the price and scope of work for the contracts. In our opinion, the government did not receive much of what it contracted for and paid for....

Key elements of what was specified in the Groupaction contracts were never delivered and no one has been able to find a report for the second contract, for which the government paid $549,990.42... Officials approved payments for work that varied considerably from what the contracts specified. In a few cases, payments were approved with the knowledge that the requirements of the contracts had not been fully met.... We found that the first contract had been amended to double its value without any documentation to support the need for the amendment... None of the documents we examined contained any explanation of how the government had determined the need for the services or why it had decided that contracting was the best way to fill the need. We found no evidence that a proper selection process was followed in awarding the first contract.... We saw little documented support for the decision to award the second and third contracts to Groupaction.... Officials did not comply with the requirements of the Financial Administration Act and contracting regulations, and did not verify that the amount of time billed for by the contractor was an acceptable reflection of the work that was done.''

At the press conference after tabling her report, Ms. Fraser stated:

The Financial Administration Act and government contracting regulations are rules that apply to public servants, not to contractors. And senior public servants broke just about every rule in the book.

The Auditor General's findings respecting the Groupaction contracts prompted her to launch a government-wide audit of the entire sponsorship program. As she noted during her press conference, "You can't put three contracts this badly managed in front of the Auditor General and believe she won't want to see the rest.'' She went on to say, "This is a completely unacceptable way for government to do business. Canadian taxpayers deserve better.''

On May 24, 2002, just barely under a year ago, the RCMP announced that it would undertake a full criminal investigation into the awarding of advertising contracts to Groupaction. Canadians are anxiously awaiting the result.

The media had a field day after Ms. Fraser reported. As an example, The Globe and Mail of September 18, 2002 reported:

Under the former federal sponsorship program, advertising agencies would receive hefty commissions, usually 12 per cent, to oversee the government's sponsorship of events.... Quebec-based agencies that were major donors, many of which also had executives who worked on Liberal Party election campaigns; Groupaction, Groupe Everest and Lafleur Communication Marketing Inc., received the lion's share of the contracts.... An internal Public Works audit in 2000 found that Groupaction and Groupe Everest received 63 per cent of the sponsorship money between them, in violation of government guidelines that limit any one company to no more than 25 per cent.

It gets worse, honourable senators. Groupaction was also the company of choice for another of the present government's high profile fiascos — the gun registry program. The agency managed to get $29.3 million in contracts since 1997 for the billion-dollar program. In that regard, the Saint John Telegraph-Journal reported on June 18, 2002:

Groupaction's firearm registry work includes yet another missing report —

The Hon. the Speaker: I am sorry to interrupt, Senator Angus, but your time has expired.

Senator Angus: May I have leave?

The Hon. the Speaker: Is leave granted, honourable senators?

Hon. Senators: Agreed.

Senator Angus: Honourable senators, the article continued:

The federal government is looking into yet another contract with the Montreal ad agency Groupaction Marketing, this one for $330,000, to devise a communications strategy that was never requested by the Justice Department to sell federal gun control policy to the public.... The contract, awarded in December 1996, called for Groupaction to canvas people affected by new gun registration rules in the Firearms Act and develop a communications strategy for the government.... The Justice Department says it never asked for such a study and never received one from Groupaction. The deal was handled by Public Works, where it was approved by Charles Guité, a senior official who has since quietly retired.

In February of this year, Public Works Minister Ralph Goodale announced that up to seven civil servants implicated in the sponsorship program face disciplinary measures, or possibly even criminal charges. Minister Goodale also suggested that the probe could extend to former Public Works minister Alphonso Gagliano, who was responsible for the department when the scandalous activity took place.

[Translation]

Honourable senators, I could go on for hours listing the scandals of the Liberal government. Due to time constraints, however, I have restricted myself to the highly disturbing, if not downright unbelievable, facts surrounding a single communications agency, Groupaction.

We can conclude that the scandal surrounding the sponsorship program occurred when the Liberals, under the pretext of combating the separatist movement, took advantage of the situation to cut some pretty sizeable cheques for their supporters. To do so, they did not hesitate to get around, or actually break, the rules for the proper awarding of government contracts.

[English]

Using the excuse of the fighting the separatist movement in Quebec, the Liberal government wrote large cheques to its loyal donors and supporters. The evidence clearly reveals that the services contracted for and so generously paid for were, in many cases, only partly delivered to the government and in all other cases, not delivered at all.

The government also appears to have been devious and deceitful by covering its tracks and leaving no paper trail for the auditors. Also, the government only decided to clean up its act after it was caught red-handed not once, but three, four or even more times.

Several days ago, honourable senators, Ralph Goodale, the minister of Public Works responsible for federal contracting practices these days, unveiled a series of new measures aimed at bringing some semblance of integrity to this huge annual expenditure of public funds on government advertising. Mr. Goodale, now known as the government's resident Mr. Integrity, acknowledged in announcing the new rules: "I think we have the process configured so it will be open, transparent and fair.... I think what we have now is a really strong, credible set of rules.'' As for using advertising contracts as rewards to party faithful for services during election campaigns, Goodale said: "That's just not on any more. That may have been the old way of doing business, but that stuff won't fly with the public in this day and age, nor should it.''

(1630)

According to an editorial in the Ottawa Sun last Friday:

In the decade the Chrétien government has been in power, Liberal-friendly ad agencies have dined out on an estimated $1.5 billion in federal advertising contracts. In the past year alone, federal departments have burned through close to $200 million, advertising everything from SARS to savings bonds. By default, the lion's share has gone to a tight little circle of firms up to their executive suites in Grits....There is no way to calculate exactly how many millions of dollars of Canadian taxpayers' money have been wasted in all this.

Honourable senators, Auditor General Fraser has indicated that the new rules for awarding government advertising contracts are a step in the right direction. I agree. However, she said:

...the proof will be in how the policies are implemented. We'll have to wait and see. In many cases the government has very good policies and procedures. It's how they are put into practice that becomes troublesome.

All of this really makes one wonder how many other such nauseating messes are in the Liberal closet, waiting to be uncovered. It is clear that these contracts were blatant pork barrel patronage, pure and simple. The more information that comes to light about this government's contract dealings, the more one can plainly observe the flagrant pattern of sleaze and abuse. The Liberals priorities are simple: reward your friends and hide the truth from Canadians.

Canadians work hard, honourable senators. Canadian taxpayers pay a significant portion of their hard-earned money to the government. Honourable senators, it is simply unacceptable that Canadians' tax dollars be wasted in this deplorable way and used to contribute to such unethical and dishonest behaviour. Those responsible must be held to account for their flagrantly improper actions.

Some Hon. Senators: Hear, hear!  

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© Copyright Senator W. David Angus 2004
Senate of Canada