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Ottawa — Prime Minister Paul Martin wavered on his allegations of ''political direction'' in the sponsorship program Tuesday after Jean Pelletier, the top political operative in the previous Liberal government, denied that he interfered in the management of the program.
Mr. Pelletier, the long-time chief of staff to former prime minister Jean Chrétien, said he was consulted every second month on the sporting and cultural events that were to receive federal funding.
Throughout his daylong testimony to a parliamentary inquiry, however, Mr. Pelletier insisted that he responded with recommendations — not directives — to the lead bureaucrat, Chuck Guité.
"The final decision to fund or sponsor an event and not another one belonged to the managers of the program," Mr. Pelletier said.
He acknowledged that his interventions carried a lot of weight, given his position of power, but said that he acted on the clear understanding that the bureaucracy was in charge of the management of federal programs.
Mr. Pelletier also insisted that he never intervened in the awarding of contracts to advertising firms.
Those firms received $100-million in sponsorship funds, at times for little or no work.
"The Prime Minister's Office had no direct or indirect role in the selection of the agencies," Mr. Pelletier said.
Mr. Pelletier joined the former minister of public works, Alfonso Gagliano, in denying that he ever approached the heads of Crown corporations to participate in the sponsorship program.
Later in the day, Mr. Martin said he took Mr. Pelletier at his word on the absence of political direction in the program.
"Mr. Pelletier would certainly know. What I was saying is, I was raising all this in the context of the Crown corporations. As you know, I was really quite upset with the cavalier attitude that some of the Crown corporations took," he said.
Mr. Martin's comments were in marked contrast to his angry outburst in February at the scandal that engulfed the Department of Public Works and Crown corporations such as Via Rail and Canada Post.
"There had to be political direction," he said at the time. "You have a small group of bureaucrats over here, you have the Crown corporations over here. Somebody was providing direction."
Conservative MP Jason Kenney accused the Prime Minister of changing his story in an effort to pin the scandal on the bureaucracy, in particular on Mr. Guité.
"He started out by blaming a rogue group of bureaucrats. Then he blamed Jean Chrétien and political interference, which he said was very clear. Now he's backtracking on that. It looks like Paul Martin is looking for a fall guy," Mr. Kenney said.
At the hearings, Mr. Pelletier said he first heard "street rumours" in 2000 of problems with the sponsorship program, including favouritism toward some advertising firms. Mr. Pelletier said he discussed the matter with his boss, Mr. Chrétien, as well as Mr. Gagliano.
Mr. Pelletier said he did not press the matter further after Mr. Gagliano told him that the program had been audited, that the problems were not of a criminal nature and that a solution was in place.
Despite the controversy, Mr. Pelletier vigorously defended the legitimacy of the sponsorship program, saying Ottawa put up Canadian flags and banners in Quebec to raise its profile as part of a fight against the separatist government in the province. The government's priority, he said, was preserving national unity.
"It's like the battle of Coke and Pepsi. If, suddenly, Coke decides not to put its name everywhere, and Pepsi is everywhere, everybody will go to Pepsi. It's as simple as that with mass media information," Mr. Pelletier said.
While he acknowledged a role in the approval of events that received sponsorship funds, Mr. Pelletier said that Liberal officials were not involved in the alleged fraud and wrongdoing that have plagued the program. As such, he said he was surprised to hear Mr. Martin's assertion of a "political direction" at the heart of the scandal in February.
"I don't know what allowed him to make that statement," Mr. Pelletier said.
Suggesting he was unhappy with Mr. Martin's handling of the scandal, Mr. Pelletier at one point said that everything has changed in the federal government of late.
"These days, what is normal and what is abnormal, I don't know any more," he said.
According to Mr. Pelletier's testimony, a number of Liberal officials — such as then-PMO official Jean Carle or Mr. Gagliano's onetime chief of staff, Jean-Marc Bard — convened in his office at various points with Mr. Guité to discuss the events that deserved federal funds. Mr. Pelletier said political officials acted as a "sounding board" for the bureaucrats to select the events.
"I would have seen the janitor if it would have helped the cause of Canadian unity," Mr. Pelletier said.
Mr. Pelletier was dismissed last month as the chairman of Via Rail over disparaging comments about an ex-employee of the Crown corporation, former Olympic athlete Myriam Bédard.
Citing a legal dispute with the government over his firing, Mr. Pelletier refused to comment on the matter.
Also Tuesday: In Montreal, former Via Rail president Marc LeFrançois, fired in March amid the federal sponsorship scandal, filed a $2.7-million wrongful-dismissal suit against the federal government.
The suit, filed in Quebec Superior Court, also alleges the government defamed him when it let him go after allegations of financial improprieties at the national rail carrier.
"The suspension and firing of the plaintiff were undertaken in an irrational, unfair and illegal fashion for politically opportunistic reasons," Mr. LeFrançois said in the court document.
With reports from Campbell Clark, Gloria Galloway and Canadian Press
