Ottawa — Opposition politicians charge that a series of audits dating back to 1996 that found serious managerial and ethical breaches in the government's advertising and sponsorship programs show a lengthy cover-up by Liberal politicians -- and a senior government minister admits that's possible.
A 1996 internal audit of the government's advertising unit, then called APORS, was prompted by a staff member's complaint that contracting guidelines were being violated. The audit found that APORS, then headed by J. Charles (Chuck) Guité, the civil servant who went on to head the sponsorship program created in 1997, broke rules on bidding competitions and awarding contracts.
The 1996 audit led to a second review by Ernst & Young that also found administrative and ethical wrongdoing. At the time, the department involved, Public Works, was not required to report the audits to the Treasury Board and the findings went largely unnoticed.
In 2000, an internal audit of the sponsorship program found serious mismanagement and inappropriate practices by the ad agencies that earned hefty commissions on the sponsorships. Prime Minister Paul Martin said the audit was the first he heard about the irregularities.
"We need to know why the government took no action on this [the 1996] audit," said John Williams, the Conservative chairman of the public accounts committee, which is investigating the sponsorship scandal.
"I think they [the Liberals] were aware four years before that that there was a significant problem," said Mr. Williams. "It may well be that there is a cover-up since 1996."
Treasury Board President Reg Alcock agreed that politicians and bureaucrats with something to hide may have swept problems under the rug. Mr. Williams has asked for the name and current employment status of the whistle blower, whose initial complaints to Mr. Guité were apparently ignored -- and who was reportedly censured, but not fired, for raising the complaints.
Despite problems found in the 1996 audit, Mr. Guité was placed in charge of a new, expanded sponsorship program in 1997 under Public Works's new Communication Co-ordination and Services Branch after Jean Chrétien signed a document requesting new funds to create the program. Mr. Guité was promoted and placed outside the normal chain of command, reporting directly to the deputy minister.
The 2000 audit was released on a government website and reported in The Globe and Mail in October of 2000.
But the auditors' notes, obtained by The Globe and Mail in 2002, showed that the auditors found more serious concerns, including reports from CCSB employees that some files were "highly political" and that those who questioned actions were told to mind their own business.
Mr. Alcock said if there was involvement from the minister's office and the communications group in hiding problems "then it's doubly possible there was a cover-up."
The Auditor-General reported that the office of former public works minister Alfonso Gagliano was directly involved in the program, and the bureaucrats who should have fixed problems could be the ones involved in them, he said. And since 1990, no Treasury Board controllers were monitoring departments' activities.
Although he said he was speculating on what happened, Mr. Alcock said that the fact that the department had no outside controls allowed for more serious problems to go uncovered.
"That's the problem, when you've only got one line of control for the activity, if you've got a person who's gone wrong in that line of activity, you've got nobody who's identifying it."
He said the government called a public inquiry because of the allegations of political interference, and is recreating a controllership system.
MPs at the committee, however, grilled Treasury Board Secretary Jim Judd over why the Treasury Board approved $40-million in additional funding for the sponsorship program in February, 2001, seven months after the 2000 audit had uncovered abuses.
Conservative MP Jim Kenney noted that there were "no conditions attached to the approval of the $40-million," adding that he found the whole approval process extremely peculiar. "How could that happen?" he asked.
Mr. Judd explained that the 2000 audit prompted a plan to fix the program, and it was up to Mr. Gagliano, then the public works minister, to report any subsequent problems.
The fact that Mr. Gagliano did not come forward to detail additional difficulties provided "some sense of security" that the problems had been addressed, Mr. Judd said.
At the start of yesterday's committee hearing, the members were handed lists of employees within the RCMP and Via Rail who authorized sponsorship transactions that the Auditor-General deemed improper.
The lists showed that Via president Marc LeFrançois, now suspended without pay, authorized most of the Via transactions, along with a small number of other senior officials.
The list from the RCMP contained the names of 11 people associated with the force's 125th anniversary celebration.
Opposition politicians charge that a series of audits dating back to 1996 that found serious managerial and ethical breaches in the government's advertising and sponsorship programs show a lengthy cover-up by Liberal politicians -- and a senior government minister admits that's possible.
A 1996 internal audit of the government's advertising unit, then called APORS, was prompted by a staff member's complaint that contracting guidelines were being violated. The audit found that APORS, then headed by J. Charles (Chuck) Guité, the civil servant who went on to head the sponsorship program created in 1997, broke rules on bidding competitions and awarding contracts.
The 1996 audit led to a second review by Ernst & Young that also found administrative and ethical wrongdoing. At the time, the Public Works department, which was responsible for the program, was not required to report the audits to the Treasury Board and the findings went largely unnoticed.
"We need to know why the government took no action on this [the 1996] audit," said John Williams, the Conservative chairman of the public accounts committee, which is investigating the sponsorship scandal.
"I think they [the Liberals] were aware four years before that that there was a significant problem," said Mr. Williams. "It may well be that there is a cover-up since 1996."
Treasury Board President Reg Alcock agreed that politicians and bureaucrats with something to hide may have swept problems under the rug.
Mr. Williams has asked for the name and current employment status of the whistle blower, whose initial complaints to Mr. Guité were apparently ignored -- and who was reportedly censured, but not fired, for raising the complaints.
Despite problems found in the 1996 audit, Mr. Guité was placed in charge of a new, expanded sponsorship program in 1997 under Public Works's new communication co-ordination and services branch after Jean Chrétien signed a document requesting new funds to create the program. Mr. Guité was promoted and placed outside the normal chain of command, reporting directly to the deputy minister.
In 2000, an internal audit of the sponsorship program found serious mismanagement and inappropriate practices by the ad agencies that earned hefty commissions on the sponsorships; that audit was released on a government Web site and reported in The Globe and Mail in October of 2000.
But the auditors' notes, obtained by The Globe and Mail in 2002, showed that the auditors found more serious concerns, including reports from CCSB employees that some files were "highly political" and that those who questioned actions were told to mind their own business.
Mr. Alcock said if there was involvement from the minister's office and the communications group in hiding problems "then it's doubly possible there was a cover-up."
The Auditor-General reported that the office of former public works minister Alfonso Gagliano was directly involved in the program, and the bureaucrats who should have fixed problems could be the ones involved in them, he said. And since 1990, no Treasury Board controllers were monitoring departments' activities.
Although he said he was speculating on what happened, Mr. Alcock said that the fact that the department had no outside controls allowed for more serious problems to go undiscovered.
"That's the problem, when you've only got one line of control for the activity, if you've got a person who's gone wrong in that line of activity, you've got nobody who's identifying it."
He said the government called a public inquiry because of the allegations of political interference, and is recreating a controllership system.
MPs at the committee, however, grilled Treasury Board Secretary Jim Judd about why the Treasury Board approved $40-million in additional funding for the sponsorship program in February, 2001, seven months after the 2000 audit had uncovered abuses.
Conservative MP Jim Kenney noted that there were "no conditions attached to the approval of the $40-million," adding that he found the whole approval process extremely peculiar. "How could that happen?" he asked.
Mr. Judd explained that the 2000 audit prompted a plan to fix the program, and it was up to Mr. Gagliano, then the public works minister, to report any subsequent problems.
The fact that Mr. Gagliano did not come forward to detail additional difficulties provided "some sense of security" that the problems had been addressed, Mr. Judd said.
At the start of yesterday's committee hearing, the members were handed lists of employees within the RCMP and Via Rail who authorized sponsorship transactions that the Auditor-General deemed improper.
The lists showed that Via president Marc LeFrançois, now suspended without pay, authorized most of the Via transactions, along with a small number of other senior officials.
The list from the RCMP contained the names of 11 people associated with the force's 125th anniversary celebration.
