It may be somewhat of an anticlimax after the fireworks at Parliament this evening, but the Gomery Inquiry heard testimony today that the money-laundering schemes at the heart of Adscam did not arise accidentally. Daniel Dezainde testified today that Jacques Corriveau bragged to him about how Corriveau himself had created the kickback structure himself to allow the Liberals to avoid campaign-finance regulation:

Jacques Corriveau, a close friend of Jean Chrétien who made $8-million in sponsorship subcontracts, candidly told an official at the Quebec Liberal party wing that he had set up a kickback system, the Gomery inquiry heard Wednesday.

Daniel Dezainde, who was the director-general of the Liberal Quebec wing in 2001, said that the admission came during a lunch he had with Mr. Corriveau.

He said Mr. Corriveau told him: “In the past, I set up a system of kickbacks with communication agencies and I kept a part of it for my expenses and I made the rest available for the party.”

Corriveau, a close friend of Jean Chrétien and a central player in Liberal politics, has often been named during Gomery testimony. This, however, is the first time that a witness has been so explicit about Corriveau being the architect of the money-laundering organization that funneled Sponsorship Program money to handpicked contractors that would reliably give it back to the Liberals, either in cash or by using it to hire Liberal workers and allow them to work off the books. It also confirms that this conspiracy just didn't organically grow from overzealous but benign intentions, but that the system had a deliberate design to defraud the Canadian taxpayers.

Dezainde also testified that Alfonse Gagliano introduced Dezainde to his associate, Joe Morselli, who was described as "the real boss" in the Liberal Party financing scheme, even though Morselli had no official connection to the Liberals:

In other testimony, Mr. Dezainde says he was introduced to Mr. Morselli and was told he was “the real boss,” and advised not to antagonize him. Mr. Dezainde said he was baffled because Mr. Morselli had no official title.

Mr. Dezainde said Benoît Corbeil, his predecessor, introduced him to Mr. Morselli, a close friend of the former public works minister.

The meeting over espresso was at Frank's restaurant, made famous as the place where Mr. Brault left an envelope of cash on the table.

The inquiry previously heard that Mr. Dezainde and others had to go to PMO to fire a fundraiser Mr. Morselli had hired because the fundraiser, Beryl Wasjman, was organizing unreported fundraisers.

Mr. Dezainde said Mr. Morselli gave himself the title of VP finance committee and put it on a business card with party logo. He said Mr. Wasjman similarly gave himself business cards with the title “assistant director of operations.”

Beryl Wajsman, as you may imagine, has plenty to say in response to this allegation. However, we'll get back to that shortly, as Dezainde continued to expand on Morselli's notion of being a boss, as reported in the National Post, but curiously omitted in the G&M (via Small Dead Animals):

Dezainde's appearance at the inquiry also took a dramatic turn when he broke down in tears after mentioning an alleged threat by an associate of then-public works minister Alfonso Gagliano during a spat over underground party fundraising.

The witness lost his composure after explaining how the party finances at Montreal headquarters had been "taken hostage'' by Gagliano associates, including aide Joe Morselli. Dezainde said Morselli blew a gasket in July 2001 after Dezainde refused to rehire a fundraiser fired days earlier for lobbying government departments, in writing, on party letterhead.

Dezainde said Morselli confronted him in the canteen of the Montreal office and pointed a finger centimetres from his face.

"He said, 'From here on in, I declare war against you,''' recalled Dezainde.

He said he immediately reported the incident to Gagliano, who blamed the incident on Morselli's bad temper and promised to have words with his confidant.

Dezainde broke down as he recalled telling friends and family about the tense moment. Presiding judge John Gomery, just before ordering a break in the proceedings, asked him: "You considered this to be a threat of physical violence?''

Dezainde replied: "Yes.''

If that wasn't enough to get people thinking that Kate at SDA might not be far off the mark calling this group the Libranos, consider a contemporaneous report from the Ottawa Citizen a few months earlier that claimed the RCMP had suspected organized-crime infiltration of Parliamentary politics. Tim Naumetz wrote in September 2000 that Commissioner Giuliano Zaccardelli warned Canadians in a press conference of the threat:

During a remarkably candid news conference, Commissioner Giuliano Zaccardelli said yesterday that criminal groups are focusing on Parliament, the courts and other institutions with the aim of "destabilizing" the political system.

"For the first time in this country, we are seeing signs of criminal organizations that are so sophisticated that they actually are focusing on destabilizing certain aspects of our society," said Commissioner Zaccardelli. The commissioner is a 30-year veteran of the RCMP who was previously the force's deputy commissioner in charge of the fight against organized crime.

"That's a real threat to us. There are criminal organizations that target this destabilization of our parliamentary system."

Commissioner Zaccardelli's comments shocked MPs, who said the commissioner should inform the House of Commons, through Speaker Gilbert Parent, if the RCMP has evidence of political corruption or attempts to corrupt politicians.

Asked if he could cite cases where criminals have targeted politicians or whether he was "fearmongering," Commissioner Zaccardelli replied: "It's not fearmongering in the least. I can't give you, obviously, specific details, but we clearly have information that indicates that a sophisticated criminal organization, as part of their strategy, is not only to maximize their profits through illegal activity, but in doing that, in maximizing their profits, where they can attempt to try and corrupt and to try to destabilize (the) situation, that's where they flourish."

That eerily foreshadows much of what we now know about Adscam, although so far no one has tied any of it to organized crime, at least not yet. The New York Daily News has claimed that Gagliano was an associate of the Gambino family, but little in the way of substantiation has been produced publicly.

However, Beryl Wajsman says that Dezainde should not be believed. In our interview (which is still being transcribed), Wajsman particularly singled out Dezainde as a bigoted and difficult man, and in this context his alleged distaste for Italians may make his testimony unreliable. So said Wajsman in a lengthy statement rebutting a number of specific testimony given today by Dezainde:

There are severe racial and ethnic undertones in this Dezainde story that is crucial to understanding what went on at the party. Understanding that, will give you an idea of what I went through with him. The fact that he works for Saada, who is Jewish, has no bearing. That’s just a cheque for Dezainde. Saada had no connection to the Jewish community and his first exposure cam through a request he made of me some five years ago....

When I accepted the mandate from Gagliano and Morselli for this sectoral financing to cultural communities I made it a condition that we respond to concerns the communities had and do outreach.

As I wrote to Gagliano, “When citizens ask for guidance from the Party of the ruling government, we have an obligation to provide that guidance and make of our offices more than just a processing center for membership cards and cheques….That is how you build a culture of commitment…. And if you can’t, then what in blazes is that office in existence for!”

Dezainde had a meeting about these “letters” with Gagliano and Morselli who told him that Dezainde couldn’t didn’t even read English properly and the letters were perfectly innocent. The letters involved helping leaders of social and community groups with their groups activities. Not with business. ...

The business cards I had bore a public relations title that Benoit Corbeil approved.

I will post Beryl's complete statement in the extended entry (click on the link below to read it). Beryl makes his distrust and distaste of Dezainde clear, so the key will be to see which parts of Dezainde's testimony can be corroborated. Nevertheless, the pattern of money-laundering and the featherbedding has always reminded me of a typical Mafia-style situation where fake workers get added to payrolls in order to make payoffs with salaries from linked companies. If Dezainde told the truth about that portion of his testimony, it would fit nicely with the escalating fears of Mafia influence on Parliament at the RCMP.

I wonder if Gomery will allow the testimony to go down that path, or if he will instead cut off any testimony not strictly related to Adscam.

Beryl Wajsman's Statement on Dezainde Testimony

11 May 2005
Montreal

RECAP OF MY RESPONSE TO DEZAINDE TESTIMONY

There are severe racial and ethnic undertones in this Dezainde story that is crucial to understanding what went on at the party. Understanding that, will give you an idea of what I went through with him. The fact that he works for Saada, who is Jewish, has no bearing. That’s just a cheque for Dezainde. Saada had no connection to the Jewish community and his first exposure cam through a request he made of me some five years ago.

Dezainde said the PMO was not happy with my dismissal. Maybe it was because someone up there understood that if my family name was French and not Jewish Dezainde would not have considered work for social and community groups as “lobbying”?

How convenient that Dezainde “destroyed” the letters he attempts to smear me with. Well I have letters from the people we served and in what capacity and have deposited them with the Gomery Commission.

I engaged in no lobbying. There was a lot of speaking to social and cultural and community groups and responding to any needs they, or their leaders, may have had.

When I accepted the mandate from Gagliano and Morselli for this sectoral financing to cultural communities I made it a condition that we respond to concerns the communities had and do outreach.

As I wrote to Gagliano, “When citizens ask for guidance from the Party of the ruling government, we have an obligation to provide that guidance and make of our offices more than just a processing center for membership cards and cheques….That is how you build a culture of commitment…. And if you can’t, then what in blazes is that office in existence for!”

Dezainde had a meeting about these “letters” with Gagliano and Morselli who told him that Dezainde couldn’t didn’t even read English properly and the letters were perfectly innocent. The letters involved helping leaders of social and community groups with their groups activities. Not with business.

The only company stationery used was by community and social leaders on community and social issues who may have sent them on company stationary. But they did not concern business.

Dezainde just wanted to close down the opening of the party that we had started to social, cultural and community groups.

I wonder what Justice Minister Cotler would say about destruction of evidence and destruction of reputation? Great due process.

Gagliano did not tell Dezainde not to occupy himself with finance, but to deal with the financial events in the ridings and let me continue with the sectoral financings. The Federal Liberal Agency would continue as always under its own direction on corporate and large individual donors.

The business cards I had bore a public relations title that Benoit Corbeil approved.

My consulting work was clearly for sectoral community financing. The first one was at the Ritz-Carlton on Feb.22, 2001, which brought in some $150,000.

There was never an arrangement for percentage payments. There were no commissions. This is a complete fabrication. I was paid by cheque from the Liberal Party from the start. Same amount every two weeks as a consultant of $2500. Plus expenses.

The car I used was leased by party accountant Daniel Cloutier. I had nothing to do with it with the quality or terms. He said he wanted to lease it from a friend of his on the south shore

I never said to Dezainde that I worked for Joe Morselli. I briefed Dezainde fully and told him I would continue to do so as I did Minister Gagliano and Mr. Morselli. I told him that as a consultant my mandate came from the Political Minister for Quebec. Dezainde told me he was upset that Gagliano had told him to stay out of sectoral financing events and did not want these social and cultural community leaders in the finance commission. I told him to take it up with Gagliano.

The Government service and program guide I produced was not for contributors, but for the community groups we were trying to bring in. All these groups had asked what the government was doing for them. I tried to answer that together with the Liberal Faxes we did. The Party had nothing to give anyone to explain what the government was doing and why they should be contributing.

Cheques were always flowing in from my work even between the two sectoral financings as I was always speaking to groups and raising contributions. They totalled almost $300,000 in six months and all cheques were delivered to Daniel Cloutier who never gave an accounting back to Gagliano, Morselli, Corbeil or me despite countless requests. Thankfully I kept copies many of these cheques.

The government had stopped publishing this type of guide in 1995. It was called Info-Source. The guide was not issued broadly, but sent out to only a couple of dozen groups.

Dezainde was not a virgin but was aware of everything going on. His resentment came from the fact of Gagliano’s opposition to his appointment and the fact that he didn’t want the party opened up.

There was no sectoral funding before I got there. It was Morselli’s idea to create it specifically for the LPC(Q). The “big names” were controlled by the Federal Liberal Agency and the Laurier Club. It had nothing to do with my project. My names were each solicited by me.

Francoise Patry didn’t like Gagliano because she blamed him, for some reason, for her husband not being in Cabinet. But this was just anecdotal gossip in the party.

So Dezainde, in his nauseating false piety, acted as an apologist for Corriveau who passed around so much cash. Yet it was the party’s accountant Daniel Cloutier who insisted that I use Pluri-Design for all events.

Gagliano and Morselli told Dezainde to attend the University Club fundraiser three times. Dezainde chose to go to Quebec City that night.

By the end of June the LPC (Q) had received almost $300,000 from my work.

The party printed the numbered tickets for the June 28th event. I didn’t. Gagliano attended. There were 175 people leaders of all cultural communities. It was not a private cocktail. I have produced copies of all documents and pictures of all the people there including all cheques and deposited them with Gomery. Dezainde was informed every week. Cloutier got the bills and ok’d the printing as did Gagliano.

Dezainde was also wrong on corporate fundraising. That was always done by the Federal Liberal Agency. What I was doing was “sectoral” in the sense that it engaged with community sectors, not corporate. The fact that I acted as a resource for these groups and answered their questions when they had some, established a firm base whether the party was in power or not.

Beryl Wajsman
President

Trackback Pings

TrackBack URL for this entry is