Category: Canada

Greg Weston writes in today’s Ottawa Sun that the Gomery testimony not only paints a bleak picture of corruption and sleaze regarding the Sponsorship Program, but that it also contains clues showing that the graft extends far beyond that — and possibly involving billions of dollars:

While the auditor general found bureaucrats broke “every rule in the book” in the sponsorship scandal, evidence is emerging at the Gomery inquiry that Adscam may be only the tip of corruption in government contracting.
In one case that emerged at Gomery this week, Groupaction president Brault described how a $100,000 bribe got the firm over $5 million in contracts with the federal Justice Department.
According to the AG, in 1998, Justice officials were not happy with work being done by Groupaction and wanted to re-tender the contract. The retendering process began, but suddenly “was halted without explanation, and Groupaction was retained until mid-2002” after getting another $5.4 million in contracts.
What really happened, according to Brault, was he had asked Liberal Party bagman Joe Morselli to see if anything could be done to help Groupaction keep the contract in 1999. The two men met one day in Montreal, Brault testified, and Morselli told him: “$100,000 and your problem is solved.”
Brault said he slipped the first $50,000 to Morselli at a spaghetti dinner, and never got around to paying the second instalment before the sponsorship scandal erupted in 2002.

Canadians can certainly be excused for missing some of the subtleties that Weston notices for today’s column. After all, the release of the Brault testimony showed many of them for the first time the extent and brazenness of graft and corruption that ran rampant through the Sponsorship Program. The breadth of the embezzlement made such a splash that missing some of the less-overt links to other programs was easy to do. However, Weston points out several such connections in his column today. None of them are damning — yet, anyway. However, prosecutors surely will pick up their threads and may yet unravel a much broader pattern of corruption.
Weston says that Martin may be able to lay Adscam off on the Chretien regime, even though Martin himself was finance minister for Chretien and had responsibility for overseeing the use of the monies in the Sponsorship Program. Martin won’t be able to escape blame if the scandal widens appreciably, though. That may soon be coming, and may explain why the Conservatives have been content thus far to wait for more testimony before initiating any action that will cause the fall of the government.
UPDATE: More at Debbye’s excellent blog, Being American in T.O.

Testimony continued in public at the Gomery Inquiry on Friday, and much of it devastated the Liberal Party and its former leader, Jean Chretien. Witnesses tied Adscam efforts directly to Chretien’s staff, including his brother Gaby, for the first time since the publication ban was lifted earlier this week:

STAFFERS OF former PM Jean Chretien received secret payments to fund his victorious 1993 Shawinigan election campaign from a Montreal ad firm lobbying for federal contracts, the Gomery inquiry heard yesterday. Former Groupaction Marketing employee Alain Renaud said two years after the election, Chretien’s brother Gabriel personally set up meetings for him with a senior PMO staffer and top Liberal officials in a bid to open the floodgates of federal contracts.
Renaud, who was hired by Groupaction founder Jean Brault in 1994 to bring in federal contracts, added to his former boss’s explosive testimony about secret donations to key Liberals. …
Renaud said Brault showed him a $30,000 cheque payable to Chretien’s then chief of staff, Michel Fournier, during the 1993 federal election campaign.
“Were these cheques for the campaign of the Liberal Party or Mr. Chretien’s campaign?” commission lawyer Bernard Roy asked.
“Mr. Chretien’s campaign,” Renaud replied.

Renaud tied the payments from Groupaction directly to the people around Chretien. He recounted $50,000 in payments between Jean Brault and Fournier — Brault only admitted to $6,000 — that went to Lib spokesman Daniel-Yves Durand in 1993. Renaud also testified that when business ran slow from the government, he went directly to former Quebec president Michel Beliveau, and that Beliveau would contact Chretien’s chief of staff, Jean Pelletier, in order to rectify the situation. Renaud told the inquiry that he redirected more than a million dollars in sponsorship money back into the Liberal Party in return for all of this access and the advertising contracts Groupaction received from the Sponsorship Program.
Canadians may ask themselves where Chretien falls into all of this. The people he hired certainly appear to have their hands into the corruption up to the armpits. The closest that anyone has directly testified so far about Chretien’s involvement is his brother, who appears to have been instrumental in making Sponsorship Program arrangements and clandestine payments. However, Renaud also testified that Brault showed him a $30,000 check made out to Fournier in 1993 but intended for Chretien:

Jean Brault, whose dramatic testimony at the sponsorship inquiry has rocked the country, donated $30,000 to ex-prime minister Jean Chretien’s victorious 1993 campaign in the hopes of landing future federal contracts, the inquiry was told Friday.
Former Groupaction employee Alain Renaud testified that a year after the Liberals swept to power in 1993, Brault showed him a $30,000 cheque payable to Michel Fournier, who served as Chretien’s chief of staff when he was Opposition leader. …
“(Brault) said he invested a fair sum in the Liberal campaign and he would surely get federal government contracts,” Renaud said under questioning from chief inquiry counsel Bernard Roy.
“Were these cheques for the campaign of the Liberal party or Mr. Chretien’s campaign?” Roy asked.
Renaud replied: “Mr. Chretien’s campaign.”

Brault’s alleged investment certainly paid off, if true. That $30K brought in $60 million in contracts. If that can be corroborated, it provides yet another strong link between the corruption and Chretien’s inner circle — and beyond that, the core of the Liberal Party.

A couple of updates on Adscam for Canadian readers this morning:
First, after I posted about the Toronto Sun’s allegations yesterday about Parti Quebecois receiving Sponsorship Program monies through Groupaction, several people e-mailed and commented that PQ vigorously denied the allegations and that the Sun had reported factually incorrect data. Specifically, the contract to which the Sun tied the illegal payments expired in 1998. However, Greg Weston’s column in today’s Sun makes the chronology clear :

As we reported yesterday, Alain Renaud, a senior executive who worked for the ad firm Groupaction during the Adscam years, claims that while the company was getting $43 million in sponsorship funds, it was slipping thousands of dollars to the PQ.
In one deal, Renaud says, Groupaction paid about $90,000 to the PQ in return for a $4.5-million advertising contract with the Quebec liquor board, the SAQ.
The PQ, of course, went berserk over the story, denying it with separatist vigour. Groupaction had actually lost the bid for the liquor board contract in late 1998, the party insisted. Too bad Renaud was talking about Groupaction’s contract from 1996-97.

It does indeed appear that money spent on convincing the Quebecois not to secede from Canada went into the pockets of the very separatists it was meant to oppose. This led to a particularly uncomfortable exchange between Conservative leader Stephen Harper and Liberal PM Paul Martin during yesterday’s Question Period:

Conservative Leader Stephen Harper made the perfectly sensible point that since “hundreds of thousands of tax dollars may have been funnelled through the Liberal sponsorship program to the Parti Quebecois, I guess the Keystone Crooks stole the money and gave it to the wrong people.”
Harper asked, could the PM “guarantee Canadian taxpayers that not one red cent of their money went to the separatist cause in Quebec in the name of national unity?”
Martin, of course, could give no such guarantee.

In another update, CTV confirms that Justice Gomery will decide this morning whether to continue the publication ban now that Jean Brault’s testimony has been completed, and of course reported through this site and others. As I mentioned before, an end to the ban would be the best possible result, as Canadians would get first-hand reporting on the courtroom testimony and all the information they want on the scandal.
However, if Justice Gomery does not lift the ban, my source has prepared an update which will be sent later today to me. I assume that will cover the testimony from Monday and Tuesday, and possibly the cross-examination yesterday. If it comes through — which is completely at the discretion of my source — I will post it as soon as I’m able.
UPDATE: Justice Gomery will announce the decision on the ban at 2 pm EDT, according to a separate source.

Justice Gomery has put off a decision on lifting the publication ban on Adscam testimony until tomorrow, in part because Liberal cross-examination of Jean Brault took longer than expected:

Mr. Justice John Gomery decided late in the day Wednesday that he needed more time to consider whether to allow the testimony of Mr. Brault to be reported in the media after Mr. Brault completed his time on the stand.
Judge Gomery is to make a decision Thursday morning.
If he lifts the ban, it may start the ball rolling for opposition parties to pose a non-confidence motion in the Liberals and potentially bring the government down. Opposition parties believe that Mr. Brault’s testimony is extremely damaging to the Liberal Party.

If the ban gets lifted, expect the media to explode with information. Based on a few conversations I’ve had with some Canadian journalists, they cannot wait to tell you this story.

The Toronto Sun has developed its own independent sources into the Sponsorship Program scandal, uncovering more corruption at Groupaction while Jean Brault testifies under a publication ban at the Gomery Inquiry. The Canadian website Angry in the Great White North points out the article by Greg Weston, who reveals that the Liberals were not the only beneficiaries of the political shenanigans at Groupaction:

A MONTREAL advertising firm that received more than $40 million in AdScam sponsorship contracts paid huge kickbacks to both the federal Liberal party and the Quebec separatists, senior executives of the company have told Sun Media. “I remember seeing the cheques,” one former Groupaction executive said of payments to the federal Liberal party in Quebec.
The man spoke on condition that he not be identified until he testifies at the Gomery inquiry sometime over the coming weeks.
The exec said the president of Groupaction, Jean Brault, made no secret around the company about where the kickback cash was going and for what.
“He spoke to me about it … having to pay money back to the Liberal Party” in return for contracts.

But the source makes clear that the separatist Parti Quebecois duplicated the Liberal efforts to launder political contributions through Groupaction and its employees. This may come as a shock to Canadians, as the Sponsorship Program was specifically designed to help the Quebecois feel more comfortable as part of the Canadian nation:

The $250 million in sponsorships that the previous Liberal government pumped into Quebec was supposed to help fight the separatists after the near-miss referendum in 1995.
But another former Groupaction executive, Alain Renaud, said that while the firm was getting millions of dollars in federal sponsorship money, it was secretly cutting cheques to the separatist Parti Quebecois.
Renaud said that in one transaction, a total of about $90,000 was given to the PQ as part of Groupaction’s getting a $4.5-million advertising contract for the Quebec liquor board, called the SAQ.
Groupaction apparently won the contract in a competition when a bagman for the Parti Quebecois had a meeting with the firm’s top executives.
One of those executives told Sun Media: “The bagman came by and said: ‘Well, you won the bid, and all that’s needed now is a signature, and the documents are on the minister’s desk to be signed, and it’s going to cost you fifty grand.’ ”
Renaud recalled about $45,000 a year in donations were to be paid to the PQ for two years.

In other words, a good part of the $250 million that Canadians spent out of their tax money to hold onto Quebec went not only to the Liberal Party for their re-election efforts and personal gain — it also went to the separatists that the government wanted to rebut.
How’s that for irony?
If this comes out in the Gomery Inquiry, expect PQ to demand standing as the Liberals have received to cross-examine witnesses. That legal standing may wind up being the Scarlet Letter of Adscam.

My source for the testimony for the Gomery Inquiry has told me not to expect an update today on yesterday’s or today’s hearings tonight. The actions of the Attorney General have spooked some people in the courtroom, and apparently Justice Gomery has threatened to clear out the spectators and the TV feeds if the leaks continue. Things may change tomorrow, or even later on tonight. If I get an update, I will post it as soon as I’m able.
Just as yesterday, I did a number of interviews with Canadian media today. Most of the questions were the same, but the people with whom I spoke were uniformly friendly, courteous, and gracious. This has been true across Canada, as I believe I have spoken with media in almost every province now. It’s been quite impressive. The last Canadian interview I did was for a magazine in Montreal, and they asked me what kind of impression I have of Canadians after this, and I told him that after doing a number of interviews and reading the thoughtful comments and e-mails from my site, I have a new appreciation for Canada.
The last interview of the day was with News.com’s Declan McCullagh, who interviewed FEC commissioner Bradley Smith and touched off the blog reaction to the new Internet regulation that the FEC proposed. The interview became more of a chat, and Declan has already posted his take on our talk:

Morrissey now has laryngitis as a result of a rapid-fire series of interviews from Canadian news organizations. He’s found them a bit bizarre. “They can’t ask me about the case itself because they can’t reproduce anything that has to do with the testimony,” Morrissey said in an interview. “They can’t ask me about my blog because they can’t reproduce the URL.”
Canadian publications and bloggers have been left in the difficult position of attempting to describe the violation of a judicial order without revealing which Web site did it. The National Post claimed it could not mention Morrissey by name, and one blogger in Toronto wrote that “I have avoided linking to the U.S. blogger in question. I also deleted a comment someone posted” with alleged Adscam testimony.
Canada’s attorney general is investigating the legality of the U.S. blog posting. Government lawyers may charge Canadian Web publishers with contempt of court if they reproduce some of the Adscam testimony or perhaps even link to Morrissey’s blog, the Toronto Sun reported.
That announcement is prompting Morrissey to worry about two possibilities: his confidential source being scared away, and a vacation that his family has planned in nearby Canada. “They can find me in contempt of court,” he said. “That’s fine. I just won’t travel to Canada until it expires.”

Actually, I was kidding about the vacation in Canada, although I’d certainly love to visit there again sometime soon without getting pinched at the border. I do have to keep in mind, though, that Justice Gomery can issue a contempt citation against me. It would have little weight here in Minnesota, but if I crossed the border, it would become a bit more of a problem.
Finally, let me again apologize for the difficulties in connecting to the website. Hosting Matters found a problem in my logfile this evening and corrected it, so you should see a marked improvement in access this evening.
UPDATE: Please note that I am not reluctant to post material from my source or another one that I can reasonably verify. The source from which my material has come wants to ensure his/her own safety at the moment from exposure and legal action, which I find reasonable. Hopefully, more material will come soon.
In the meantime, Aaron at Free Will got notes from a Quebec reader regarding Brault’s testimony from last Thursday. It’s more detailed but a bit more difficult to follow, but our two accounts appear to match up pretty well.

In an odd display of twisted priorities, Canada’s Attorney General may start investigating the Canadian blogosphere to find bloggers who have linked back to CQ and broken the publication ban:

CANADA’S attorney general is probing possible breaches of a publication ban set up to protect explosive testimony at the AdScam inquiry. Justice spokesman Patrick Charette said federal lawyers are looking into the Internet sites reproducing excerpts of Montreal ad exec Jean Brault’s testimony and providing a link to a U.S. blog featuring more extensive coverage of the hearing.
“We have to decide what the best course of action is,” Charette said, adding federal lawyers could charge Canadian bloggers and website owners with contempt of court or suggest AdScam Justice John Gomery issue warning letters.

So instead of chasing down felons or prosecuting violent criminals, or perhaps investigating government corruption, the AG intends to start delivering contempt citations … or even sillier, warning letters. For what? Writing about testimony to which their politicians have complete access and the media can watch but not report.
Don’t get me wrong; American AGs often have their own screwed-up priorities, too. It just seems to me that prosecuting Canadian bloggers for creating a hyperlink to my site realistically ranks rather low on the threat level for most Canadians. However, perhaps the chilling effect on Canadian bloggers from this government intimidation should be taken as an ominous sign about the future of free speech in Canada by all of its citizens.
UPDATE: People keep asking me if I worry about the Canadian government cracking down on my blog. Not with these guys on my side, I don’t…

Despite having a ruined voice thanks to a lingering bout of laryngitis, I spent most of my work breaks juggling telephone interviews with Canadian media outlets. For the most part, they wanted to know why I broke the publication ban. I told them I don’t believe in restricting free speech, either in Canada or in the US or anywhere else, and if a government has corruption problems, making them a secret hardly helps clean it up.
For CQ readers in Vancouver, I will appear on CBC’s television news program this evening, in my very first TV appearance. Bear in mind that I look like hell today and sound worse, so be kind in your judgment. I do not know whether CBC will post the video to their website, but hopefully at some point we’ll get a look at it.
Lastly, I understand that comments have stopped functioning, which may either be a hosting problem or a Typekey problem. My service is checking their side to see if the problem is on the server. I’ll lok forward to getting comments back on line shortly, and of course, I apologize for the inconvenience.
UPDATE: Comments should be fixed now! However, due to the extremely high traffic coming through the server, the comments program has to be “killed” if you take longer than 20 seconds or so to type it in. One way of getting around this is to type your comments in Notepad first, then simply cut and paste them into the Comments box. HM is trying their best to keep all services running while the load is so high…

I expect to have more information today on the Adscam testimony, as well as more background information on why this matters to both Canadians and Americans. That may come later in the day, probably in the early evening. In the meantime, if you have found this site and are looking for the original post, you can find it here. Also, I’ve created a new subcategory for Canada, which will have all of the updates on this story. Bookmark it and check back often.
Winds of Change has a great post on the scandal. Be sure to read it. Don’t forget Small Dead Animals, which has a lot of background on Adscam.
My web hosting service, Hosting Matters, has done an excellent job handling the huge boost in traffic coming from CQ’s new Canadian readers. I hope if you experience any slow loading or error messages that you remain patient. They know that traffic will go up even farther today and are doing their best to “clear the decks” for you. If you are looking for a hosting service that gives great support and proactively watches your back — and charges very reasonable fees — then definitely check out Hosting Matters. Thank you for your patience!

After CTV named Captain’s Quarters on their news program last night, the site got swarmed with tens of thousands of visitors, leading to some slower response times (sorry!) and a “magnitude” increase of traffic for blogs who I’ve linked, especially on this story. However, if you’ve linked your blog to CQ and you live six or seven hours north of me, you may receive a summons from your government, according to this report from the London Free Press this morning:

A U.S. website has breached the publication ban protecting a Montreal ad executive’s explosive and damning testimony at the federal sponsorship inquiry. The U.S. blogger riled the Gomery commission during the weekend by posting extracts of testimony given in secret Thursday by Jean Brault.
The American blog, being promoted by an all-news Canadian website, boasts “Canada’s Corruption Scandal Breaks Wide Open” and promises more to come. The owner of the Canadian website refused to comment yesterday.
Inquiry official Francois Perreault voiced shock at the publication ban breach, and said the commission co-counsel Bernard Roy and Justice John Gomery will decide today whether to charge the Canadian website owner with contempt of court.
“We never thought someone would violate the publication ban,” Perreault said. “Maybe we were more confident than we should have been.”

The Canadian website in question is Nealenews.com, which linked to my post on Saturday night or early Sunday morning. It only provided a link back to my site; it carried none of the testimony itself. In fact, it’s still headlining a link to CQ despite the threat of legal action.
In an age of instant communications and greater freedom of the press, one would think that this kind of publication ban would obviously prove futile, especially when dealing with the kind of corruption that the Gomery Commission is investigating. However, if Perreault is to be believed, no one even considered the notion that someone might talk. Either M. Perreault is hopelessly naive, or he gets the Captain Louis Renault award for being shocked, shocked that free speech goes on in a democracy.
However, despite the publication of the material in an American blog and its review by thousands of Canadians, the Gomery Commission insists that the information is not public. Perreault warns Canadians that any link to CQ or even a mention of the blog name in any Canadian publication could lead to prosecution:

Perreault warned that even if Brault’s testimony has been outed by a U.S. website, it doesn’t mean it’s now public information.
“Anyone who takes that information and diffuses it is liable to be charged with contempt of court,” Perreault said.
“Anybody who reproduces it is at risk.”

Well, you’ve been warned, my Canadian neighbors.
UPDATE: The Globe and Mail interviewed me yesterday, and published this Jane Taber article:

The explosive testimony given out of the public eye last week at the Gomery commission began appearing on websites yesterday, capping a weekend of frenzied rumours about snap elections and covert political meetings in Ottawa.
Conservative deputy leader Peter MacKay even suggested yesterday that the testimony, which is under a publication ban, could lead to criminal charges against senior Liberals. …
The publication ban does not restrict Americans from publishing or broadcasting the details of the in camera hearings. Still, the blogger joked that he isn’t planning any vacations soon to Canada.
“It’s an interesting story. It’s fascinating,” he said. “First off, I think it’s a terrible thing that you guys can’t publish this. This is the type of thing that a free press exists for is to hold their government accountable. ….. It should be you guys reporting this.”
The fact that the testimony is now circulating on the Internet and by word of mouth calls into question the effectiveness of the publication ban, Mr. MacKay said. … Mr. MacKay said his party is considering whether it should appear before the inquiry to fight the ban.
Mr. Duceppe [Bloc Quebecois] wouldn’t say whether the Bloc will seek the lifting of the publication ban.
“I want to talk to our lawyers first, to see the implications of what’s happening in the United States,” he said, referring to the Internet blog.
Said Mr. MacKay: “There is no question that if it is in fact now being circulated and is out publicly in the States or elsewhere, that this sole purpose of having the ban in place has just evaporated. There is no point. So once somebody has violated the ban there is no purpose in having it there.”

Taber reports that McKay plans on challenging Prime Minister Paul Martin in Parliament today to answer for the information that has already arisen from the Brault testimony. It could be an interesting day in Ottawa.