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April 21, 2005
Boulay Made Money From All Sides

Adscam figure Claude Boulay continued his testimony to the Gomery Inquiry yesterday, while a bit more of Jean Brault's embargoed testimony made it through the publication ban. Brault insisted that Boulay gave $50,000 in a secret donation to provincial Liberals in Quebec, a development that the BQ will certainly see as further provocation for immediate elections:

The controversial Ottawa bureaucrat in charge of the federal sponsorship program allegedly directed a $50,000 secret donation to Jean Charest's provincial Liberals, the Gomery inquiry was told in testimony that could not be reported until now.

The damaging accusation made during the testimony of ad executive Jean Brault had been under a publication ban but was made public during an exchange at the inquiry yesterday. ...

The allegation that the provincial Liberals got a covert donation from Mr. Brault in 1998 had been reported before but it is only now that the media can reveal that he allegedly was acting at the request of a federal bureaucrat.

According to the account Mr. Brault gave on April 1, the head of Groupaction Marketing Inc. got a call in 1998 from Chuck Guit, head of the sponsorship program, telling him that Mr. Charest needed money.

Mr. Charest at the time had just moved to provincial politics to face then Parti Qubcois leader Lucien Bouchard in a tightly fought Quebec election.

Mr. Brault said in his testimony that he did not know on whose behalf Mr. Guit was acting when he called him.

Mr. Brault said he then made an illicit $50,000 contribution to the Charest campaign, disguising it as a payment for professional services from Mr. Boulay's agency, Groupe Everest.

Now we not only have a money-laundering scheme for federal campaign money, but the Adscam efforts now have been shown to extend to provincial elections as well. Boulay denied the allegation, but his own credibility took some pounding as he tried to talk his way around evidence that he took commissions from all parties on several Sponsorship Program contracts, pocketing large sums of government money for himself:

Yesterday, the inquiry heard of several instances of dubious invoicing, including a 67-per-cent profit margin he made when he resold promotional sportswear to thew federal government as part of a sponsorship to promote tourism called Attractions Canada. ...

As part of the Attractions Canada project, one of Mr. Boulay's firms, Sensas Inc., paid $80,693 for golf gloves, polo shirts, backpacks and windbreakers. The gear was sold to Everest, which added agency fees, commissions and other charges, and then resold to the Public Works department for $243,313.

The inquiry heard of another area where Mr. Boulay benefited handsomely:

In several files, in addition to the standard 12-per-cent commission he got from the government for handling a sponsorship, he asked the sponsorship recipient for a commission too.

For the 1997 Quebec Summer Games, he got 12 per cent on a $220,000 sponsorship. However, he also pocketed a hefty 20-per-cent cut from the organizers of the event.

In another case, he pocketed a 10-per-cent fee off a $75,000 sponsorship given to publishing house Hibou diteurs Inc. for a catalogue of the works of the painter and sculptor Jean-Paul Riopelle. Already, his agency would have received a 12-per-cent commission for handling the sponsorship.

M. Boulay apparently had a good thing going on at Sensas. Double commissions, hefty markups on goods and services, and expensive yet essentially meaningless invoicing made up the bulk of his good fortune from the Sponsorship Program. Yet despite the high costs associated with Boulay, all he had to to renew a $27M contract was write one letter to Public Works Minister Alfonso Gagliano -- despite the fact that Boulay's efforts competed directly with another government agency, the Canadian Tourism Commission.

Boulay couldn't even convince Justice Gomery to buy his explanation of separate transactions for all of the money flowing into his pockets. Gomery pointed out that despite Boulay's pretenses of common business practices, he never told anyone that he had collected his fees from the other parties involved, putting his actions within the broad definition of fraud, if not the legal sense of the term.

How will Paul Martin address all of this in tonight's speech?

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Posted by Ed Morrissey at April 21, 2005 7:32 AM

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