CQ reader Ed_in_Cda points out an article in today’s Ottawa Sun which delineates some interesting transactions relating to Sponsorship Program money. Ad agencies in the program spent over $600,000 on a series of soccer matches pitting three international soccer teams against Canadians in Quebec and China. Most of the money went towards gifts for the athletes, although most of that cash went elsewhere instead:
A Montreal ad firm used $120,000 in sponsorship money to offer all-expense paid trips to bring three soccer teams from as far away as Vietnam to Quebec, the Adscam inquiry heard yesterday. Groupe Everest also dipped into the funds meant to boost national unity to buy $500,000 in gifts such as parasols and Timex watches for former PM Jean Chretien to hand out during his 1999 Team Canada mission to China.
Agency VP Diane Deslauriers took credit yesterday for orchestrating the soccer match at the 1997 Quebec Games that saw French-speaking teams from Hanoi, France and Western Canada fly in for a “friendship” game.
Deslauriers said her firm billed Public Works $120,000 to finance the teams’ expenses on top of securing a $220,000 sponsorship for the Quebec Games — reaping a total $49,000 commission.
Groupe Everest made almost $50K in commissions on a contract of $220,000, while billing Public Works $120,000 for financing services. How much of those expenses can be corroborated through receipts? Obviously, flight arrangements can be expensive, but spending $120,000 to get teams involved in a $220,000 event doesn’t make a lot of sense, either economically or mathematically.
That isn’t the last of the unusual math applications discussed in Adscam testimony yesterday, either:
Benoit Renaud, an Everest subcontractor who specialized in promotional items, testified yesterday that he billed the sponsorship program almost $500,000 for 12,340 items destined for Chretien’s 1999 Team Canada trip to China.
Renaud said he only paid $166,000 for items ranging from Swiss Army money clips to pewter spoons and golf club covers.
The remaining $282,597 went toward the hours that both he and his brother Alain put into the purchase and administrative costs, Renaud said. According to his time sheet, Renaud put in 300 hours at $90 per hour — or an entire month of 10-hour days.
Renaud spent twice as much on salaries for himself and his brother as he did on the gifts he bought the athletes? Even at the rates mentioned, 300 hours at $90 amounts to $27,000. Assuming his brother got paid at the same rate, that amounts to $54,000, a huge sum for one month’s work of work — but far below the $287,000 in salary and “administrative” costs associated with Renaud’s shopping spree.
What kind of “administrative” costs can amount to over $200,000 in a single month? Perhaps administrating transfers of cash to the Liberal Party as part of the money-laundering effort that Adscam provided?