Charles Guité, the public works official who ran the federal sponsorship program until 1999, appears before the public accounts committee in Ottawa on Thursday. (Jonathan Hayward/CP)
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Paul Martin's office, when he was finance minister, tried to exert influence over which advertising agencies received contracts in the sponsorship program on at least one occasion, a parliamentary committee heard Thursday.
Chuck Guité, the former bureaucrat at the centre of the sponsorship storm, told the public works committee looking into the sponsorship scandal that Mr. Martin's office called more than once to ask that particular agencies be considered to be put on a list to be considered for the program.
"Mr. Martin did not intervene but his office did," Mr. Guité told the committee after about five hours of testimony.
He said received calls from Mr. Martin's office requesting that specific agencies be added to a list of companies bidding for a communications contract.
"I remember one time, either on the telephone or in person [with Terrie O'Leary, Mr. Martin's assistant ] her comment was, and I quote, 'Well, Paul would prefer....' "
Other calls from Ms. O'Leary recommended firms for "research", and Mr. Guité recalled a particular incident when she said that Mr. Martin would "prefer" that a particular agency, Earnscliffe, be used. Earnscliffe Strategy Group is a lobbying and communications firm packed with Martin advisers.
"[They] tried influencing the decision. I think that if someone today would ask through access to information for all the contracts awarded to that company, you would have some surprises," Mr. Guité told the committee.
He also recalled that a letter from current Finance Minister Ralph Goodale that tried to influence a decision.
The revelations were shocking to the committee because earlier, Mr. Guité had testifed that while the PMO and former public works ministers were involved in decisions related to the sponsorship program, they never named which agency should receive a contract.
In his long-awaited testimony before the parliamentary committee looking into the scandal Thursday, Mr. Guité said he met often with former public works ministers and with officials in the Prime Minister's Office, where discussions were held on the sponsorship process.
Those high-powered officials did have input, he said.
"The PMO, [former public works] minister Alfonso Gagliano and [former public works minister David] Dingwall never suggested the name or got involved in the agency selection process," Mr. Guité said.
However, Mr. Guité emphasized that there is a big difference between political input and political interference.
"Did they have input into the program of who got the sponsorship, which sponsorship we're going to do? Obviously."
But he also said at another point: "To me, there's quite a bit of difference and to say that they interfered, i.e., selection of agencies, never. I would not let them do that. Because ministers are not to interfere with the selection process."
Later, outside the committee meeting, Conservative member Vic Toews said he saw absolutely no difference between political input and political interference.
"When a minister tells you something in that context, that's what happening."
Mr. Guité, who managed $250-million program from 1997 to 1999 and oversaw the expenditures, emphasized that at the time, the sponsorship program was seen as the highest priority of the government and did not have the same oversights as any other government program, such as an advertising program.
He saw himself as one of the generals of the program but said he did not run it alone and was not the one solely making the decisions.
The program was created in 1995 after the Quebec referendum, to give more visibility to Canada.
The public accounts committee is investigating the Auditor-General's report, which said that $100-million was funnelled through the public works department to several Liberal-friendly ad agencies.
Mr. Guité's testimony is seen as key to the probe. As well, Mr. Martin may gauge the response to his testimony in deciding whether to call a spring election or whether to hold off until fall. Mr. Martin has said he won't call an election until he is satisfied that Canadians have enough information on the sponsorship scandal.
Thursday's revelations that his office made calls could harm his plans.
Mr. Guité angered members of the committee by disagreeing with many portions of the Auditor-General's scathing report.
He said that the Auditor-General said in her report that she could not find contracts and documentation.
"That's impossible, absolutely impossible."
The former bureaucrat said that on his watch, files could not have gone missing, so they must have disappeared after he left in 1999.
"Every file had a contract and an invoice. You cannot make a payment without a contract and an invoice," he said, repeating the statement a number of times.
He also said that at no time did the Communications Co-ordination Services Branch (CCSB), of which he was in charge and which administered the sponsorship program, intentionally try to hide funds or the source of funds.
Later in the testimony, however, he did admit to shredding at least one invoice, because he said it was made out to Jean Pelletier of the PMO rather than to CCSB, and the PMO was not responsible for the invoices.
"Well, Mr. Guité , it felt it seemed it was okay just to chuck the rules, to say we're not going to comply with the regular operating standards that seem to exist for everybody else, " Peter MacKay, a Conservative member of the committee, responded.
Both inside and outside the committee meeting, MPs said they doubted much of what Mr. Guité was telling them. The former bureaucrat told the committee that when he first began working for Mr. Dingwall, he clearly remembers the then-public works minister telling him, "You won't rat on them; you won't rat on us."
Mr. Guité said he remembers the day as well as when John F. Kennedy was shot or the day Elvis Presley died. He recalled telling Mr. Dingwall that it would be no problem since he respected ministerial confidentiality.
Later, Mr. Toews told him it was obvious he was still covering up for his buddies.
"You're not ratting on them, that's for sure. You're not ratting on anybody."
Conservative MP Jason Kenney agreed, telling reporters that, at this point, Mr. Guité has nothing to lose by telling the truth. "Unfortunately it looks to us like he's covering for his political bosses."
At one point, saying that the $100-million was not missing as the Auditor-General had suggested, Mr. Guité said that if he were to have access to the files of the advertising agencies in question, he would be able to find the $100-million.
He used several examples, including the Bluenose schooner tour, which was funded by the program.
Mr. Guité said that although the Bluenose project got $2.5-million, a source told the media the end result was only $300,000 in a trust fund. He said that the source failed to mention the breakdown of where the money was spent, including $600,000 for a travelling exhibit and a number of other expenses.
Mr. Guité began his testimony Thursday by saying the damning Auditor-General's report that launched the scandal was lacking in information and misleading to the government at large.
He told the public accounts committee that he would prove that the report by Auditor-General Sheila Fraser was full of inaccuracies and inconsistencies.
The former head of the sponsorship program began by quoting committee chairman John Williams, who accused him of thumbing his nose at parliament.
"I have spent most of my career serving Parliament. I have never thumbed my nose at Parliament," he said.
He also quoted another article which said that the committee was prepared to make things rather awkward for him.
"You have succeeded," he said, describing how, ever since he became known as the man at the centre of the sponsorship scandal, he and his wife were subject to abuse while at their trailer in Arizona.
He said people had driven by their home, yelling expletives.
Other statements in Mr. Guité's testimony:
· He said that Allan Cutler, a former public works employee whose complaints about the program led to an internal inquiry in 1996, "screwed around with the files" thus making it impossible for the Auditor-General to find some of the documents. "Somebody had been tinkering with the files. My comment that Mr. Cutler tinkered with the files, I stand to that today."
· He said he never met with former prime minister Jean Chrétien, only with Mr. Pelletier. He said he never called Mr. Pelletier, rather, Mr. Pelletier called him.
· He contradicted statements by Don Boudria, a former Liberal government house leader, who claimed not to have never heard of Mr. Guité. Mr. Guité said that he had met with Mr. Boudria on a number of occasions, including having dinner with Mr. Boudria and a well-known hockey player.
· He contradicted earlier testimony from Mr. Gagliano who said that he met with Mr. Guité only three or four times a year, saying that the two met sometimes up to three times a week but usually met at least once a month.
· He admitted to keeping as little information as possible on file in case an access-to-information request was filed by the sovereigntists, and he did not want to give them ammunition to use against the government
· He argued that the Auditor-General's report saying that little or no value was received for the government's money was wrong. "The government of Canada received value for its money. The proof is in the pudding."
MPs at the committee disagreed.
