Just came out in the local press FYI.
Thanks and regards.
Biomed

'Shocking' misuse of public funds
Martin launches public inquiry


CANADIAN PRESS

OTTAWA (CP) - The quarter-billion-dollar federal sponsorship fiasco was so widespread that even Canada's fabled national police force was used to funnel cash to friends of the federal government, Auditor General Sheila Fraser said today.
Fraser delivered a brutally methodical account of how the Public Works Department used Crown corporations and the RCMP to systematically shovel funds from a national-unity program to a select group of businesses.

The damning indictment claimed its first casualty before it was even made public. Former public works minister Alfonso Gagliano was summarily fired from his job as ambassador to Denmark by Prime Minister Paul Martin.

Gagliano's department ran a now-infamous sponsorship and advertising program that saw organizers of Quebec public events paid huge sums to display Canadian flags or federal logos from 1997 to 2003.

But more than $100 million - or 40 per cent of the $250 million fund - ended up in the pockets of middlemen who sometimes did nothing more than just turn over cheques, Fraser charged.

The list of mysterious transactions, enigmatic banking and blatant fraud was detailed in detached but devastating prose in her report.

Crown corporations like VIA Rail, Canada Post, and the Port of Montreal were also fingered in a report that has potentially explosive consequences ahead of an expected spring election.

"This is just such a blatant misuse of public funds. It is shocking. . . . Words escape me," Fraser told a news conference.

"This wasn't just a matter of missing documentation or bending the rules. These methods were apparently designed to pay commissions to communications agencies while hiding the source of the funds."

Each glance at her own report stirred her to outrage, Fraser said. She called for an independent inquiry into the affair.

The government immediately agreed to hold an investigation.

Justice John Gomery of the Quebec Superior Court will lead the public inquiry. Another jurist, Andre Gauthier, was named special counsel for financial recovery. Gauthier's job will be to launch civil suits to recover some of the squandered money.

The government has had several months to prepare its response to what turns out to be a ticking political time bomb tossed into Martin's lap by his predecessor, Jean Chrétien.

Fraser's report was supposed to be made public last November, but Chrétien prorogued Parliament which delayed the auditor general's indictment until he was out of office.

But Martin's field generals and his entire cabinet have been seized by the need to dull the sting of a blow that could ground the prime minister's lofty public approval ratings.

Several senior members of the government were at a meeting at 8 a.m. today. Aides could be seen lugging bulky briefing material into the Langevin building housing the prime minister's office.

One senior government official promised to follow the investigation wherever it might lead - even if it hurts the Liberal party.

"We're not interested in a witch hunt and we're not interested in anything that could negatively affect the party brand," said the official.

"But at the end of the day the public interest demands that the answers to these questions be provided.

"We're the government. We're not just a political party."

Martin immediately called the report's findings "intolerable" and announcing several steps to contain the damage.

"Canadians deserve better and we will deal with the findings of the auditor general's report in all of its facets and we will do so immediately and we will do so thoroughly," Martin said.

He said the government will take four steps:


An independent public inquiry to probe the scandal.

An immediate review of the auditor's report by the House of Commons public accounts committee.

Appoint a special counsel to recover public funds which were inappropriately attained.

Introduce other measures to ensure the problems never occur again, including whistleblower protection and better management practices.
Opposition critics swiftly pounced at the scent of government blood. Their primary question: Why didn't Martin take action when he was finance minister in Chrétien's cabinet alongside Gagliano?

"Why did the prime minister stay silent when long ago he could have just said, `Stop it, this isn't right," Grant Hill, the interim Conservative leader, asked in the Commons.

"The prime minister knew about the scandal and yet he said nothing and he did nothing. Why did he choose to be silent instead of speaking up?"

Martin responded that he was unaware of any wrongdoing and approved funding for the sponsorship program on the assumption that rules were being followed.

But several opposition critics predicted that closer examination of the money trail will further embarrass the prime minister and damage the reputation of the governing party.

"This was not a government operation," NDP MP Bill Blaikie said of the sponsorship program. "This was a Liberal party operation."

When allegations of mismanagement first surfaced two years ago, the RCMP was called in to launch a criminal investigation that has since resulted in charges against Montreal businessman Paul Coffin.

Calling in the Mounties to investigate this time will be impossible, said Conservative MP John Williams.

"They (the RCMP) have to explain why they have become involved in a money-laundering scheme. This is our national police force," he said.

"This is a scandal of the greatest magnitude."

The RCMP's 125th anniversary in 1999 turned into an embarrassing waste of taxpayer dollars, Fraser said.

Public Works contributed $3 million to a trio of ad agencies - Lafleur, Media/I.D.A. Vision and Gosselin - who were responsible for transferring the money to the RCMP.

Those three agencies took a combined $1.3 million in fees and commissions and transferred $1.7 million to the RCMP for its anniversary celebration.

Fraser's audit concluded that the RCMP's Quebec division received its payments through a separate non-government bank account, which violates the federal Financial Administration Act.

The transactions were recorded manually rather than in the RCMP's standard accounting system, and some of the supporting documents were subsequently destroyed.

Fraser outlined similar practices in a stamp competition organized by Canada Post; in a Via Rail-sponsored television series on hockey legend Maurice Richard; and in a project to raise $1.5 million for a giant screen TV for the federally run Port of Montreal.

The auditor general expressed two major concerns with the practice.

First, there was obviously no need to go through private middlemen to transfer cheques from a government department to a government agency or crown corporation.

And it was useless to pay federal agencies like the RCMP to display the federal logo at their events. Treasury Board guidelines required them to do it, with or without the sponsorship program, Fraser noted.

The Chrétien government created the now-infamous program as a response to the near-catastrophe of the 1995 Quebec referendum.

Federal funds were used to fund sports and cultural events - almost always in Quebec - while event organizers plastered Canadian flags and federal posters for visitors to see.

But the government used the fund to confer lavish commissions on a small group of ad agencies that acted as middlemen.

Fraser had already denounced the practice in a narrower 2002 probe that focused on $1.6 million transferred to Groupaction Marketing Inc.

She concluded at the time that the federal government broke ``just about every rule in the book" in awarding contracts to the Montreal agency.

Her report released today also blasted the government in other areas. Fraser also concluded that:


The Chrétien government ignored federal contracting policies in rushing to spend $101 million on two Bombardier jets for the prime minister and other VIPs.

Indian and Northern Affairs has failed to track spending or resolve disputes linked to native land claims worth more than $1.2 billion.
Her probe into the sponsorship fiasco highlighted a number of other irregularities.

Among them was the story of a communications firm that received a $600 commission from a $5,600 grant to a Quebec college.

All the government received in return was the MP's name added to a mural at the college.

She also explained how the Montreal Impact soccer team received almost $150,000 in sponsorship funds during the 1998-99 indoor season.

A similar request by the Edmonton Drillers soccer team was rejected, with the government claiming no funds were available.


ADDITION TO THIS NEWS:
The Fraser Report
Here are some highlights from the auditor general's report on the sponsorship program:


Crown corporations and senior government officials running sponsorship and advertising programs showed flagrant disregard for rules and produced little value for money.
$3 million sponsorship of RCMP’s 125th anniversary celebrations was redundant and wasteful. Some bank records of Quebec Mounties destroyed.
Indian Affairs has failed to properly track spending involved in $1.2 billion land claims settlements.
$101-million spent on two government VIP jets was untendered and unnecessary. Government disagrees.
Canada’s parks are crumbling, heritage documents are rotting because of improper storage and government is allowing private collectors to snap up archival material that is of historic importance.
Employment Insurance surplus reaches $43.8 billion. Two-thirds of those calling EI centres for help get a busy signal.

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"Change before you have to" : Jack Welch

'Biggest waste of money'
Tremblay `held clout,' source says
No controls over sponsorship funding


ROBERT CRIBB AND SUSAN DELACOURT
STAFF REPORTERS

OTTAWA - A man with a front-row seat to the federal government's sponsorship scandal says he watched millions in public money squandered with a brazen lack of accountability.

The sponsorship program "was the biggest waste of money in the world," says the federal insider, who spoke with the Star on the condition of anonymity. "It fascinated me because it was an endless flow of money and there was no established process to determine who got what."

The man, who worked in the department of public works' Communications Co-ordination Services Branch in 2001 and 2002 under former executive director Pierre Tremblay, painted a vivid picture of just how out of control the management of the sponsorship program was.

"You want a festival? Just write Pierre Tremblay and the money comes out of nowhere," he recalled.

"Tremblay held all the clout. He was very close to the minister (Alfonso Gagliano)."

Gagliano, who served as public works minister and Quebec lieutenant under former prime minister Jean Chrétien, had been serving as ambassador to Denmark until last month, when Prime Minister Paul Martin recalled him in the fallout of Auditor-General Sheila Fraser's scathing Feb. 10 report on the sponsorship program.

Tremblay had been Gagliano's chief of staff before being parachuted from the political side into the bureaucracy in 1997, and this crossover is now seen as part of the rampant politicization that seemed to be at large in the running of the sponsorship program.

Tremblay had a lot of power for a public servant, the man said.

"He had access to whatever he wanted. ... I raised the issue at one point, `How is it that we pay advertising firms to do this stuff we can do ourselves?' There was never a clear answer. `That's the way it is,' was the only response I ever got."

Yesterday, Public Works Minister Stephen Owen announced the RCMP is now looking into 18 cases involving the possible misuse of sponsorship money. That's an additional five from when Fraser released her report last month.

Last month, after Martin called for bureaucrats to step forward with information on the sponsorship program, the insider says he attempted to share what he knew with Martin's office.

He showed the Star an e-mail he sent to Martin's two public e-mail addresses in mid-February outlining a number of concerns including the lack of established protocols in the department. He says there has been no response and a follow-up call to the Prime Minister's Office was never returned.

Justin Kingsley, a spokesperson for Martin's office, said last night that all tips of this sort are being referred to the public inquiry being led by Quebec Superior Court Justice John Gomery and acknowledgements are sent.

"We appreciate people coming forward and want to assure them that all information will be treated seriously," Kingsley said. Without knowing this man's name, however, he could not explain why that procedure was not followed in this case. The PMO promised to look more into the correspondence to track down this tip.

Recalling his time working under Tremblay, the insider says his department seemed flush with money.

Requests for equipment worth thousands of dollars were rubber-stamped without question.

Staff events featured gorgeous catered breakfasts.

And when it came to requests for sponsorship events across the country, the department's chequebook was wide open, he says.

He says Tremblay was also very friendly with the advertising executives who received millions in sponsorship funds now under investigation.

"There were meetings and golf games

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"Change before you have to" : Jack Welch

No excuse for corruption but to put things into perspective for newcomers


Canada is considered among the least ten corrupt contries in the world
http://edition.cnn.com/2002/WORLD/asiapcf/east/08/29/corrupt.index/
Finland (9.7)


Denmark (9.5)


New Zealand (9.5)


Iceland (9.4)


Singapore (9.3)


Sweden (9.3)


Canada (9.0)


Netherlands (9.0)


Luxembourg (9.0)


United Kingdom (8.7)



India is among top 30
http://www.nationmaster.com/graph-T/gov_cor

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Recommended Services- Servicedomino.com
http://www.servicedomino.com

Yep India is among top 30.... that's why you can see 2-3 km. long line of prospective immigrants in front of CHC, New Delhi. All these immigrants are given false hope that they are going to land in the country which is ranked best place to live on this earth for 4 years. If asked, no one would have any clue of another great news.... that within last 4 years Canada stand at Number 7 .. do some simple math to get the % of this downfall. Can someone tell me the reason behind this free fall of the great nation????

If you talk about "perspective" than why don't we immigrate to Finland? No we won't.. because Finland do not market their own country as they have enough tax payers to feed their own population. And in Canada our former Immigration Minister accepted that this country need immigrant tax payers to feed their baby boomer generation, the tax we are paying is eaten away either by curruption or baby boomers.... think.... what will happen when we will reach 65... Already crippling CPP would be able to feed us??????

Thanks and regards.
Biomed

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"Change before you have to" : Jack Welch

How do you kinow I wont go to finland? Maybe when I reach 65 in another 34 yrs I'll go to Finland.
Till then even living in one of the 20 best countries will do for me. Actually when Canada falls from 7 to 50 I'll really worry.

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http://www.servicedomino.com

On a positive (or lighter) note, I hope when you turn 65 or even before that, you and I would be wanting to migrate (???) to India. 34 years is a long time - in 30 years countries like Singapore and Dubai have turned from nothing to absolute world class cities - with no resources at hand, just the will of the citizens. We in India have much more than that!!

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Chandresh

Advice is free – lessons I charge for!!

Yeah you are right Chandresh , in my case may be much earlier than 65.. who knows????

Thanks and regards.
Biomed

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"Change before you have to" : Jack Welch