Gomery blames Chrétien for sponsorship flaws

Former prime minister Jean Chrétien and his chief of staff must be held responsible for the flawed running of the federal sponsorship program from 1994 to 2003, Justice John Gomery said in his first report on the scandal, made public Tuesday.

Prime Minister Paul Martin has referred the report to the RCMP for possible criminal investigations, ordered the Liberal Party to repay $1.14 million to the public purse and asked that 10 people named in the report be banned from the party for life. Chrétien was not one of those people, said Martin.

Gomery also assigned blame to a handful of other people involved in the $332 million scheme to raise the federal government's visibility, primarily in post-sovereignty-referendum Quebec.

Former prime minister Jean Chretien leaves his home in Ottawa, Tuesday, Nov. 1. (CP Photo/Jonathan Hayward)

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They include Chuck Guité, the "untouchable" bureaucrat who considered the program his baby and used it to reward friends as well as Liberal-linked ad firms, and Jean Corriveau, a good friend of Chrétien's who ran a "kickback scheme" to funnel taxpayers' dollars from the program to his own pocket and the Quebec wing of the Liberal Party of Canada.

Also implicated is former public works minister Alfonso Gagliano, "who chose to perpetuate the irregular manner of directing the sponsorship program."

Justice John Gomery finishes his statement in Ottawa, Tuesday.

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However, those people would not have been able to mismanage or benefit from the sponsorship program had it been set up correctly in the first place, Gomery found.

"Since Mr. Chrétien chose to run the program from his own office, and to have his own exempt staff take charge of its direction, he is accountable for the defective manner in which the sponsorship program and initiatives were implemented."

Chrétien's lawyer David Scott said he would be making a "very strong recommendation" to his client, hinting to reporters that he would be taking Gomery's report to a federal court. Scott suggested he would seek to have the findings challenged based on Gomery being biased and ignoring certain evidence.

• FROM FEB. 8, 2005: Chrétien calls scandal-plagued sponsorship program 'necessary and right'

Chrétien's longtime chief of staff, Jean Pelletier, was Guité's chief contact in the Prime Minister's Office, acting as an un-elected cabinet minister when it came to running the mostly unpublicized and unchecked disbursement of millions of dollars, Gomery wrote.

"Mr. Pelletier failed to take the most elementary precautions against mismanagement – and Mr. Chrétien was responsible for him," the commission chairman wrote.

However, Gomery said there was no evidence that either man was directly involved in Corriveau's "wrongdoing," entitling them "to be exonerated from blame for Mr. Corriveau's misconduct."

Martin bears no blame

Also exonerated by the report was Paul Martin, who was Chretien's minister of finance during most of the time the sponsorship program was in operation.

"The Department of Finance and its minister have no oversight role for other departments' expenditures, other than setting the financial context via the fiscal framework," the report said.

As a result, Martin "is entitled, like other ministers in the Quebec caucus, to be exonerated from any blame for carelessness or misconduct."

Guité was 'untouchable'

Gomery, normally a justice of the Quebec Superior Court, held 136 hearings and listened to 172 witnesses between September 2004 and June 2005 before presenting his report on what went wrong with the program.

Much of the three-book report traces the relationships and transactions that led to almost half of all available sponsorship dollars going to advertising and communications firms in Quebec, chiefly five agencies with strong ties to the Liberal Party of Canada.

• FROM MAY 24, 2005: Auditors dig up millions more spent on 'sponsorship-related' activities

Of the $332 million spent between 1994 and 2003, Gomery said, 44.4 per cent or $147 million went to the agencies in the form of commissions and production fees.

The chief channeller of those payments was Guité, who seemed to be operating with little or no supervision from his deputy minister at Public Works and Government Services Canada, Ranald Quail.

"With the support and approval of persons at the highest level of government, Mr. Guité was untouchable and beyond the control of Mr. Quail, in spite of the latter's obligation to manage his department," Gomery wrote.

Quail was also found to hold responsibility for the program's mismanagement, though Gomery expressed sympathy with his predicament. Quail's unruly subordinate seemed to have a direct link to the Prime Minister's Office.

At the same time, Quail was dealing with Martin's deficit-cutting plans, which directed him to cut 5,800 people from his staff over three years.

Guité and Brault before the courts

Guité got no such sympathy from Gomery's report. "He was in a special category, seemingly exempt from the usual reporting rules, and not obliged to conform to normal practices and procedures ... " Gomery wrote.

"Only one subordinate, Allan Cutler, dared to challenge Mr. Guité's authority and methods and, as a result, he was declared surplus by Mr. Guité."

Guité and one of the Quebec ad firm owners who benefited most from the program, Jean Brault, face a total of six fraud charges in connection with sponsorship invoices. The two men are scheduled to go to trial in the spring, after the release of Gomery's final report on Feb. 1.

As president of Groupaction Marketing Inc., Brault has been a central figure at the inquiry. His testimony last spring detailed secret cash payments to the Liberals in return for promises of more sponsorship contracts, as well as demands from Corriveau and other Quebec Liberal officials that he place party workers on his payroll.

"The commission accepts all of Mr. Brault's testimony as credible," Gomery wrote.

THE GOMERY REPORT Highlights Full report

KEY FINDINGS A summary of who's responsible

LIBERALS' WORST FEARS Analysis

MONTREAL REACTS Tracey Madigan's Online Diary

REACTION Video: What they're saying

QUOTES In their own words

KEY PEOPLE Photos and quotes

THE PLAYERS More on the people involved

TIMELINE The latest events

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