Posted on 04/27/2005 3:25:17 PM PDT by Pikamax
Ad man says sponsorship boss Chuck Guite requested false bills
BRIAN DALY
MONTREAL (CP) - An advertising executive told the Gomery inquiry much of his $2.7 million in sponsorship income was based in part on false bills requested by program boss Chuck Guite.
Paul Coffin's scathing indictment of the one-time bureaucrat emerged on Wednesday as Justice John Gomery lifted a publication ban on most of Coffin's testimony at the sponsorship hearings.
Gomery's ruling helped shed light on a lengthy trail of falsified paperwork and inflated bills for several files, including Jean Chretien's Clarity Act on Quebec separation.
Coffin singled out Guite and the bureaucrat's assistant, Huguette Tremblay, in a scheme to bill taxpayers for maximum, pre-set production fees that were paid regardless of whether his firm did any work.
He said Guite asked him to bill for hours worked even though Coffin's firm didn't keep time sheets.
Coffin, who has been charged with 18 fraud-related counts arising from the sponsorship program, testified that Tremblay's role was to press him to send in bills at the end of each fiscal year to meet his production budget.
"I billed this way from Day One, unfortunately," Coffin told inquiry counsel Marie Cossette, referring to the date of his first sponsorship contracts in 1997.
The ad man was at first reluctant to implicate Guite, a friend with whom he socialized and who once sold him a 26-foot motorboat.
But Gomery demanded an explanation for why Coffin's bills on an array of sponsorship files included production hours that Coffin admitted were often bogus.
"Were you persuaded or was it suggested to you that you should bill in this way rather than simply billing . . . the straightforward way?" asked the judge.
"Yes, Mr. Commissioner," replied Coffin.
"Thank you," retorted the judge. "Now I'm going to ask you to tell me who that person was."
Coffin replied: "Mr. Guite."
Guite, who will testify at the inquiry later this week, is to stand trial on June 6 on fraud and conspiracy charges related to the program.
Some of the falsified bills dealt with the Clarity Act, which set tough new rules on Quebec secession when it passed in 2000.
Communication Coffin earned nearly $86,500 in commissions for a Clarity Act publicity campaign even though Coffin said he did little more than transfer bills to the government from subcontractors.
He said the stream of bogus bills began to flow from the first day his firm was chosen as part of a select group of Montreal ad agencies charged with managing sponsorship files in 1997.
Coffin and many of the other middlemen now face criminal or civil charges for pocketing $100 million in fees and commissions while delivering little value for the money.
Public Works officials would pre-set Coffin's production fees every year and then chase after him at the end of each fiscal year to make sure he billed for the amounts, he said.
"We would get a phone call from somebody at the Public Works saying 'there's still so much in the budget, are you sending more invoices?' " said Coffin.
"We would immediately send more invoices to complete the budget."
When asked who made the requests, he replied: "Mme. Huguette Tremblay is the most memorable in my mind."
Coffin said he faced a challenge in fulfilling Tremblay's request, since his company employees didn't fill out time sheets on a regular basis from 1992 until 2001.
He said he resorted to creative accounting.
"We would create invoices, commissioner."
Coffin's testimony is consistent with financial statements indicating sponsorship middlemen nearly always billed the maximum under the catch-all category "production costs and professional honorariums."
Coffin and fellow ad man Jean Lafleur have both said Public Works officials approved, and even encouraged, the massive fees each agency took for managing $250 million in sponsorship deals from 1997 to 2003.
In many cases the middlemen couldn't say what they did to earn the fees. Sometimes they billed for entertaining clients at hockey games or simply passing along paperwork and cheques.
Coffin himself admitted he sometimes billed taxpayers for work done by his wife, who was not on his payroll.
Documents also show Coffin's production fees were sometimes up to three times the value of his sponsorship contracts.
Production costs represented a massive chunk of the sponsorship budget - more than $60 million from 1996 to 2003.
Coffin, 63, was the first person charged in the scandal. He was arrested in September 2003 and charged with 18 fraud-related counts.
The charges touch on 32 of the 80 federal files his firm managed from 1995 to 2003 that were worth $8.6 million.
The events represented an array of local automobile and bicycle races, festivals and ski activities.
Coffin also told the inquiry Tuesday that he exaggerated his financial statements and his staffing levels when he first applied for government contracts in 1997.
A written presentation to Public Works listed the value of Coffin Communication contracts in 1996 as $900,000 when in fact the sales only totalled $641,000.
He also said he had four employees when in fact he and his son were the only salaried staff ever to work for Communication Coffin.
"We wanted the presentation to look proper and acceptable so we inflated the numbers a little bit," he told Cossette.
Gomery couldn't help but recall the seemingly endless stream of bogus bills, exaggerated time sheets and inflated commissions filed by ad executives who have appeared before him since February.
"I guess that's part of the advertising business," he said. "The right to exaggerate seems to be built in."
The scandal took on a new dimension this month when ad man Jean Brault said he colluded with top Liberals to funnel $1.1 million to the party in exchange for sponsorship contracts.
Coffin said he met Brault socially but had nothing to do with the scheme.
Coffin is the second ad executive to testify under the ban imposed last month by Gomery, who also barred media from reporting on Brault's testimony before allowing much of it to be made public.
Guite's testimony will also fall under the ban.
"Guite's testimony will also fall under the ban."
Hey Canadian government!! your not quite communist enough. Your semi-communist, your quasi-communist, your the margarine of communism, your the diet coke of communism, just one calorie, not "communist" enough!
Ping for a goodie....
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