Kickback scandal plagues Canada liberals

OTTAWA, Canada (AP) - Prime Minister Paul Martin scrambled Monday to prevent the fall of his government amid a kickback scandal in his Liberal Party, as a new poll showed the opposition Conservatives would easily win fresh elections if held today.

In what some say is Canada's version of Watergate, in terms of magnitude and potential damage, Martin reiterated that he had nothing to do with the ethics fiasco, in which party members are accused of having taken kickbacks from advertising agencies hired to promote federalism in the rebellious French-speaking province of Quebec.

"Not only do I have the moral authority, I have the moral responsibility," to keep the government afloat until the full inquiry into the scandal concludes in the fall, Martin said. "Canadians are entitled to ask someone to step forward and I'm the prime minister of this country. I can assure you that anyone who has been implicated is going to be punished."

How long Martin can remain prime minister is anyone's guess, and the halls of Parliament were rife with speculation about whether new elections were around the corner.

The separatist Bloc Quebecois could introduce a confidence motion by Thursday, though the more powerful Conservative Party was hedging, knowing most Canadians are not keen for new elections.

"There is a depth of anger there. The Liberal Party is in deep, deep trouble," said Richard Simeon, professor of political science at the University of Toronto.

A poll published by the Toronto Star on Monday indicates that only 25 percent of those questioned last week would vote for the Liberals if elections were held today. The Conservatives were backed by 36 percent, up 10 points from a survey taken in February.

The poll, conducted by EKOS Research Associates, surveyed 1,125 Canadians over voting age between last Thursday and Saturday, with a margin of error of 2.9 percentage points.

The scandal, based on a secret program that dates back to the 1990s and the Liberal Party leadership of former Prime Minister Jean Chretien, erupted anew last Thursday when a judge probing the alleged misuse of public funds lifted a publication ban on testimony by a Montreal ad executive.

The executive, Jean Brault, who faces fraud charges stemming from the now-defunct program, told the federal inquiry that senior Liberals forced him to secretly divert more than $818,000 to the party's Quebec wing in exchange for sponsorship contracts. During his six days of testimony, Brault spoke of hushed-up payments to Liberals in restaurants, money being given to a brother of Chretien, and reluctant contributions strong-armed out of employees.

Chretien and Martin have vehemently denied any personal knowledge of wrongdoing.

The so-called "sponsorship scandal" outraged the public when it was uncovered in 2002, after the auditor general determined that $82 million from a $204 million national unity fund went to Liberal-friendly advertising firms.

The program was developed to promote national unity in Quebec following the narrow defeat of a separatist referendum in the French-speaking province in 1995. Advertising agencies with Liberal ties allegedly received millions of dollars in exchange for little or no apparent work.

The scandal led to a deep rift in the Liberal Party, in particular between Chretien and Martin.

Amid shouting in the House of Commons on Monday, a red-faced Martin told lawmakers he was the one who dissolved the program, convened the commission to investigate the project and filed lawsuits against 19 ad agencies to recover government funds.

Martin may still have to take the fall even if it is determined that he had no knowledge of the misuse of government funds.

"The problem with corruption, when it occurs - and Watergate was a good example of this in the United States - it undermines confidence in not just the people who are involved, but in the institution that they represent. That's the real worry," said Wesley Cragg, head of Transparency International Canada, a global anti-corruption coalition.

Captains Quarters
http://www.captainsquartersblog.com/mt/

CTV: Liberals Melting Down In Polling
CTV announced the results of a new Ipsos poll this evening, taken after the release of Jean Brault's previously-embargoed testimony, which shows the Liberals trailing the Tories nationally for the first time in years. Martin's Liberals have dropped to 27%, falling another 10 points since the last Ipsos poll:

The flames of political discontent from the sponsorship scandal are scorching the Liberals, and now a new poll shows the party's national support falling to 27 per cent.
That represents a 10 percentage-point drop in the past two months, according to an Ipsos-Reid poll conducted for CTV and The Globe and Mail.

The Conservatives are up to 30 per cent, a four-point rise. The NDP are at 19 per cent. ...

Ominously, 45 per cent of Canadians say the Liberal government of Prime Minister Paul Martin has lost its "moral right" to govern.

The poll is just the latest development in five days of hell for the Liberals, who have been seen their numbers sag in other polls, are under constant Gomery-fueled attack by the opposition -- and are now hearing stories that some of their caucus members are considering defecting.

The Liberals "are not just panicked, they're freaking out," said Bob Fife, CTV's Ottawa bureau chief.

The Conservatives have steadfastly held off on calling for a no-confidence vote, preferring to allow events to run their course before triggering a new election. With more explosive testimony expected at the Gomery Inquiry and the resurfacing of the Earnscliffe allegations, the Tories may believe that a perfect political storm has yet to completely coalesce. Like any other gamble, don't expect the players to change strategy until their run ends.

Posted by Captain Ed at 11:06 PM

And again
Captains Quarters
http://www.captainsquartersblog.com/mt/archives/004275.php

April 11, 2005
Corruption Moves Past Gomery, Involves Martin Confidants
In a sign that the reformist mood has gained momentum in Ottawa, two close confidants of Prime Minister Paul Martin have been subpoenaed to testify to a Commons committee to review contracts awarded to research firms with close ties to Martin. Two other reluctant witnesses have also been subpoenaed, along with Allan Cutler, one of the Adscam whistleblowers who will testify voluntarily:

Four reluctant witnesses — including two close confidants of Prime Minister Paul Martin — will be subpoenaed by a Commons committee investigating research contracts awarded to a consulting firm closely allied with Mr. Martin. ...
Among the targets are Terrie O'Leary, who was chief of staff to Mr. Martin when he was finance minister, and David Herle, co-chairman of the Liberal campaign in the last election.

Also subpoenaed will be Warren Kinsella, a former Jean Chrétien loyalist who has been critical of Mr. Martin in the past, and former Finance Department official Peter Daniel.

At issue are public opinion research contracts that went to Earnscliffe Research, a firm that employs many long-time Martin associates. The contracts were awarded when Mr. Martin held the finance portfolio in the Chrétien cabinet.

The deals have been mentioned in testimony at the federal sponsorship inquiry. But Justice John Gomery ruled they we not within the mandate of his commission, prompting the public accounts committee to take up the issue.

The four will appear on April 18 after stalling and making excuses, of which the Commons finally tired. The timing could not be worse for Paul Martin, as he just got done insisting that he still retained the "moral authority" to continue as PM. Thus far, the Gomery inquiry has focused much more on ties to former Liberal PM Jean Chrétien, which will do enough damage to Martin's standing as it is, considering that Martin was Finance Minister and should have been responsible for ensuring that government funds were spent correctly.

However, if this new line of inquiry produces any new evidence of corruption or influence peddling, Martin will not be able to deflect the connection to his former leader. Earnscliffe Research apparently employs a number of people connected directly to Martin, and if they received government funding either for work not accomplished or outside of normal bid processes, then Martin will have been directly implicated in malfeasance. That's certainly been the allegation; last year, upcoming Gomery Inquiry witness Chuck Guité told a Commons hearing that a certain minister made sure that bids fit only one company to ensure their award to cronies:

In Friday's testimony, Guite maintained some cabinet ministers interfered with the awarding of government contracts.
"If the minister's office suggests, sends memos, prepares a scope of work designed to fit one company ... it's interfering in the process."

The retired bureaucrat said Paul Martin's former chief of staff, Terrie O'Leary, pushed Earnscliffe Research and Communications to be included on a list of companies eligible for government contracts.

Earnscliffe Research received $1.8 million in contracts from the Finance Ministry while Martin ran it under Chrétien's government, from 1993 to 2002. Some describe the firm as the sole supplier of Finance's communications needs during that period of time, a particular run of good luck in the bidding process if true. According to a 2002 article in Vigile, this issue has percolated for some time, only surfacing now with Adscam exploding onto the Canadian consciousness. The two cases have a passing resemblance, as this remark by then-ethics watchdog Howard Wilson shows:

While he wouldn't say the company should be banned from doing work for the department, Mr. Solberg said that's "definitely one of the options" Mr. Wilson should consider. He said there's little difference between the situation with Earnscliffe and that involving Mr. Palmer.
Unlike Mr. Palmer, Mr. Martin's supporters at Earnscliffe are not known to have been raising money for the minister's leadership campaign. But Mr. Solberg said it could be argued that the contracts given to Earnscliffe help to pay people who then offer their campaign services to Mr. Martin for free.

"It is almost the same thing, whether you actually go and raise money or you simply work for free in order not to have to expend money for positions that they would otherwise have to pay for. In a way, it is the same sort of thing."

That's the exact same scam that Jean Brault enabled for the Liberals at Groupaction, according to his own testimony. Any corroboration of similar connections between Martin and Earnscliffe in the Commons hearing, and the excuse that the Liberal corruption came from the Old Guard will collapse completely -- probably right along with the current government.

Posted by Captain Ed at April 11, 2005 08:50 PM

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