Auditor-General Sheila Fraser only uses the word once, and yet it permeates her report. That word is fraud.
Between 1997 and 2001, no less than $100-million of taxpayer money was diverted from government coffers to Quebec advertising agencies with close ties to the Liberal Party — for no discernible reason.
The money wasn't used to provide advertising, communications strategies or other services promoting the Canada brand in Quebec. A further $150-million was spent — some would say wasted — to that end.
No, the $100-million mostly went for nothing. It was written off as commissions and fees. It was authorized through verbal agreement, and often processed through false invoices. The money was, for all intents and purposes, laundered.
The report puts it dryly: "Roles and responsibilities were not segregated to eliminate, as far as possible, any opportunities for fraud and misstatement."
And did fraud and misstatement result?
It is not for the Auditor-General to reach such conclusions.
But she did find that payments were made "using false invoices and contracts or no written contracts at all," apparently in order "to provide commissions to communications agencies, while hiding the source of the funds and!
the true nature of the transactions."
Worst of all, "the pattern we saw of non-compliance with the rules was not the result of isolated errors. It was consistent and pervasive.
"This is how the government ran the program." The police and courts will ultimately decide how much wrongdoing has occurred. Already the RCMP have laid criminal charges against Paul Coffin, president of Montreal-based Communication Coffin, which received some of the commission money. But you will need to reach your own conclusion, when you cast your ballot in the election expected in May. You will need to decide how far political corruption reached into the Jean Chrétien government, and how much responsibility the current government must bear.
Prime Minister Paul Martin and the relevant ministers moved on half a dozen fronts to contain the political damage — appointing a political inquiry into what happened at Public Works under then-minister Alfonso Gagliano; appointing a special counsel to recover whatever money can be recovered; asking a parliamentary committee to launch its own investigation; conducting fresh investigations at Public Works; introducing whistleblower-protection legislation. But this flurry of activity to find answers can't disguise the damning and politically damaging nature of the questions themselves. Such as:
Why were senior officials in the Liberal government of Mr. Chrétien shovelling money to Liberal-friendly advertising firms in Quebec for services that were never even asked for, let alone rendered? Was it merely gross incompetence or over-the-top pork barrelling, or is something more sinister and criminal involved?
Why did Public Works funnel sponsorship money to Crown corporations such as Via Rail, Canada Post and the Business Development Bank of Canada through communications companies, allowing those companies to take huge commissions, even though they did no work for it?
(At yesterday's press conference, a reporter asked Ms. Fraser what the difference was between paying the commissions and simply "packing a suitcase full of $100 bills and walking it over to these firms?" Her response: "That's a hard question to answer, quite frankly.")
If there was corruption in the awarding of these commissions, then how deeply did the corruption infect the Chrétien government? Did it extend beyond the Department of Public Works, and into the Prime Minister's Office and the Privy Council Office, and if so, how far? There are many questions to be asked of Mr. Gagliano, who has been ordered home from his posting as ambassador to Denmark. But there are also questions for the former prime minister. What did Mr. Chrétien know and when did he know it? And if he did not know, then who in his office did? We are almost certainly going to be witness to the sad spectacle of a former prime minister testifying in defence of his actions at a public inquiry.
And here's the question that, politically at least, could trump them all. Paul Martin has lived his adult life inside the Quebec wing of the federal Liberal Party. It helped get him elected leader. Does he want us to believe that he knows nothing about the unseemly ties between the Liberal government and certain advertising and communications firms in that province?
Had he no idea at all what was going on? No doubt Mr. Martin is hoping that he will not have to answer these questions right away. The Prime Minister has adopted an aggressive — and convenient — strategy of referring what could be called the legacy embarrassments to various arm's-length investigations: The Arar case, the CSL contracts. Now we have an inquiry into the Sponsorship Scandal.
All of these investigations will not report until after the election. But the opposition, of course, has already made up its mind.
"We are talking here about money laundering and corruption at the highest level," declared Conservative MP John Williams.
For once, the accusation is not hyperbole. For once, the onus is on Mr. Martin to explain how he could have known nothing or done nothing about this national disgrace.
