Wednesday, September 15, 2004

Chretien Told Sponsorship Program Was 'His Baby'

Chretien told at start that sponsorship was his baby
Jim Brown
Canadian Press
Wednesday, September 15, 2004

OTTAWA (CP) - Former prime minister Jean Chretien was told at the start of
the federal sponsorship program that he was ultimately responsible for how
the money was spent and who got it.

Documents tabled Tuesday at a public inquiry show that Jocelyne Bourgon,
then clerk of the privy council and the country's top civil servant, wrote
to Chretien in the fall of 1997 to sort out the lines of authority.
Bourgon noted that the public works minister - then Alfonso Gagliano -
would be accountable for financial and administrative procedures under the
program.

But because Chretien had personally signed documents authorizing the
expenditure of funds, he also had a role.

That included not just broad policy matters, but also selection of the
events to be funded, wrote Bourgon.

"It is your office which determines to which projects the monies are
directed. Should questions arise in the House of Commons, for example, on
the initiatives supported by these funds, you might have to respond."

The question of who called the political shots has been at the heart of
the long-running controversy over the sponsorship program.

The documents tabled Tuesday were the clearest indication yet of
Chretien's role in the creation of the program.

There was no evidence, however, that the former prime minister was aware
of any funding abuses or other wrongdoing.

Nor was it clear whether Chretien retained political authority over
sponsorship for the full life of the program, which continued for years.

Bourgon asked, in her memo of Sept. 30 1997, what kind of support services
Chretien would need "to fulfil your accountability."

But she also asked whether he wanted to retain authority or shift it to
one of his ministers.

There was no indication of a response from Chretien in the documents, and
government officials weren't asked to elaborate in oral testimony Tuesday.

Ottawa eventually spent $250 million to sponsor a variety of cultural,
sporting and other events, with the aim of raising the federal profile in
Quebec and fighting separatism.

Auditor General Sheila Fraser has estimated that about $100 million went
in fees and commissions to middlemen with close Liberal ties.

Justice John Gomery was appointed by Prime Minster Paul Martin in February
to head the inquiry into what went wrong.

In testimony Tuesday, Jim Judd, the current deputy minister at Treasury
Board, the federal financial watchdog, initially suggested that Chretien's
authority over sponsorship was limited to general policy and overall
spending.

Under questioning by commission counsel Neil Finkelstein - and in light of
the Bourgon memo - Judd later modified that view.

He acknowledged that Chretien apparently had a "measure of accountability"
for more detailed matters, including selection of projects to be funded.

Another memo tabled Tuesday indicated senior bureaucrats were upset that
Jean Pelletier, then Chretien's chief of staff, was poaching on their
turf.

George Anderson, then deputy minister of intergovernmental affairs, noted
in February 1998 that Pelletier had contacted Treasury Board to authorize
the transfer of $17 million from a special national unity reserve fund for
use in the sponsorship program.

In the past, Treasury Board had "'never taken orders directly from the
Prime Minister's Office" on national unity matters, Anderson wrote.

He also appeared uneasy that the money was destined for the Public Works
Department, which handled day-to-day operation of the sponsorship program.

There had long been concern, said Anderson, about a Public Works habit of
requesting "large amounts of money from the (national unity) reserve
without providing much information on the ends to which it planned to
direct such funds."

Testimony at separate hearings by the Commons public accounts committee in
the spring indicated Chuck Guite, the Public Works bureaucrat running the
sponsorship program, was in frequent contact with the prime minister's
chief of staff.

Pelletier acknowledged that he sometimes discussed specific projects with
Guite. But he insisted he always left the final decision to the
appropriate bureaucrats on which events to fund.

Pelletier went on to become chairman of Via Rail after he left Chretien's
office. He was fired from the Via post by Martin earlier this year.

Cabinet documents made public in February showed that Chretien personally
signed the spending authorizations to launch the sponsorship program.

That was because the start-up money - in two chunks of $17 million for
fiscal 1996-97 and $18.8 million for 1997-98 - came out of the special
national unity reserve.

That fund was controlled by the Privy Council Office, the bureaucratic
nerve centre of the government, which works closely with the prime
minister.

© The Canadian Press 2004