Liberals operated kickback scheme: report Printer Friendly (Page 1 of 2) Top News Canadian gov't could topple as NDP yanks support US charges Canadian Guantanamo detainee France plans curfews as youths riot again Australia foils terrorist attack Canada's Air India bomb report expected this month By Randall Palmer and David Ljunggren OTTAWA (Reuters) - Members of Canada's ruling Liberal party ran an elaborate kickback scheme to illegally fund election campaigns, but Prime Minister Paul Martin knew nothing about the wrongdoing, a report into a damaging government corruption scandal said on Tuesday. Inquiry head Judge John Gomery highlighted greed, incompetence, carelessness and venality as the main problems in a deeply flawed government advertising program to promote Canadian unity in French-speaking Quebec from 1996 to 2003. He pinned some of the blame on former Prime Minister Jean Chretien. A defiant Chretien said he would ask the Federal Court to review Gomery's conclusions, saying the judge was biased against him. The scandal has dominated Canadian politics and headlines for the past 18 months, and public anger cost the Liberals their parliamentary majority in the June 2004 election. Opposition politicians reacted with outrage on Tuesday to Gomery's report, released after a year of hearings on how the advertising program channeled some C$100 million to pro-Liberal advertising firms. Martin, who ordered the inquiry, asked police to investigate and told the Liberal Party to repay more than C$1 million. He said he found the conclusions troubling. "Canadians must be able to have faith in the integrity of government and in the people who administer it. In this case, that means finding out what went wrong and repairing the system to prevent it from happening again," he said. Martin appeared to have dodged the prospect of a confidence vote in Parliament this month after opposition parties expressed reluctance about the idea. But he still faces an election early next year, and he will find it hard to win enough Liberal seats in Quebec to give him a majority government. The party's fortunes in the province plummeted last year after the scandal broke. Gomery said a handful of Quebec advertising firms had received lucrative federal contracts and then kicked some of the money back to the Liberal Party's Quebec wing, enabling it to sidestep electoral financing laws. Stephen Harper, leader of the opposition Conservatives, said Martin -- finance minister at the time of the sponsorship program -- had no option but to resign. Continued ...
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Justice John Gomery has released a preliminary report into Canada's Sponsorship Program, which was run from 1996 to 2003 by the federal Public Works Department to win support for federalism in Quebec. The program has recently come under fire for allegedly scandalous practices and has been accused of being a front to reward Liberal Party supporters. 

The issue came to a head in the spring of 2002, when the Globe and Mail, using Canada's Access to Information Act, discovered that $550,000 had been paid to Groupaction Marketing for a report that could not be located.

Former Prime Minister Jean Chrétien then ordered Auditor General Sheila Fraser to look into the matter, who promptly launched a full investigation with assistance from the Royal Canadian Mounted Police. In 2004, Fraser's audit was released and found that over $100 million was incorrectly paid to communications agencies rather than for social and cultural events which was the original intention of the program.

According to Fraser, officials "broke just about every rule in the book."

Under intense criticism from both the public and opposition parties Prime Minister Paul Martin launched a public inquiry into the scandal which was to be headed by Justice Gomery.

The report found evidence of political involvement in the handling of the program, and found an "implicit link between the contributions and the expectation that the government contracts would be awarded."

The report also claims that Chrétien holds some personal responsibility for the mismanagement. "Since Mr. Chretien chose to run the program from his own office," the report reasoned "he is accountable for the defective manner in which the sponsorship program and initiatives were implemented."

Among those accused of wrongdoing are Jean Pelletier (Chrétien's former chief of staff),  Chuck Guité (the bureaucrat in charge the program), Jacques Corriveau (president of PluriDesign Canada), and Jean Brault (president of Groupaction).