Former and likely future Liberal leadership candidate Bob Rae is working this weekend to get himself elected to the House of Commons in the riding of Toronto Centre. Rae is putting himself up as a fresh new ethical face for the Liberal Party, but this will ring hollow with voters Monday as he hired two campaign workers during his failed leadership bid that previously received Adscam money. Gomery described the Sponsorship Scandal as “elaborate kickback scheme” conducted by members of the Liberal party and their associates in Quebec.
When Rae was running to replace Bill Graham/Paul Martin as the new leader of the Liberal Party, he hired two staffers Franco Iacono and Gaetano Manganiello, two former employees of the Liberal Party of Canada.
Here is Rae’s expense filing with Elections Canada for these two individuals:
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Rae declared that $14,750 was paid to Iacono for “Salaries and Wages” while $3,000 was claimed for Manganiello in “Salaries and Wages” while $1766.26 was paid for “Miscellaneous expenses”.
What services did these two men provide for Bob Rae’s leadership campaign?
This is an important question because both Iacono and Manganiello testified before the Gomery Inquiry into the Sponsorship Scandal.
Iacono testified on May 4th, 2005 and Manganiello on May 25th, 2005.
From Iacono’s testimony before the Gomery Commission, we learn that from 1996-1997, Iacono worked for Alphonso Gagliano as a special assistant (including when Gagliano was at Public Works until September 1997. We then learn that Iacono worked for John Manley, the federal Business Development Bank and for Herb Dhaliwal before attaining employment at the Sussex Strategy Group. Prior to the 2000 election Iacono was hired by then-Liberal Party deputy director Benoit Corbeil to be the party’s regional coordinator for the island of Montreal. Iacono explained how he was paid, “I was happy to be hired for the work assigned. Mr. Corbeil simply told me to invoice COMMANDO at the address he had given me in the amount of $8,500.” According to Iacono, Corbeil told him to file an invoice for “Consulting services rendered.” We also learn that in all Iacono’s previous work for the Liberal Party he had never been paid in this way, but he didn’t question it because “In my mind, then, it was quite clear and logical, since I had a need and Mr. Corbeil had found a way to satisfy that need. It was that simple.” When Gomery said “Now, those three things [an invoice to someone other than the Liberal Party with a false description of services provided, and a payment made outside the election period] suggest to me that you may have participated in a situation that was deliberately falsified,” Iacono replied “I have to say no.”
What of COMMANDO? In Phase 1 of Gomery’s report, the Commissioner writes on p. 263,
Further contributions to the LPCQ were made by cheque, rather than in cash, but were disguised by using as an intermediary a corporation in Quebec City named Commando Communications, an inactive entity owned and controlled by one Bernard Thiboutot. Mr. Thiboutot worked for Gosselin Communications as the head of its Quebec City office, but in the year 2000, when Groupaction’s contributions were made, the assets of Gosselin Communications had already been purchased by Groupaction and Mr. Thiboutot was in effect working for Mr. Brault. He was an active supporter of the LPCQ in the eastern Quebec region.
On January 6, 2000, and again on November 1, 2000, Commando invoiced Groupaction for $10,000 for services rendered, but according to Mr. Brault, these invoices and the cheques in payment of them are evidence of political contributions that he was asked to make, to pay unexplained expenses of the LPCQ in Quebec City. Mr. Thiboutot does not deny the payments or that they were paid to Commando as political contributions.
On October 1, 2000, Mr. Thiboutot sent a further false invoice to a Groupaction subsidiary for $50,000, describing the services rendered by Commando as research and analysis. On October 13, 2000, only a short time before the federal election campaign commenced, the invoice was paid, and Mr. Thiboutot acknowledges that the proceeds were used to pay five employees of the LPCQ for their work in the forthcoming election campaign. Each of the workers sent Commando an invoice for the amount received.
And Gaetano Manganiello? Before the Commission, Manganiello testified that he worked in the PMO as a Press Office Assistant until August 2002 and then went to work for Maurizio Bevilacqua. Manganiello went back to PMO in December 2003 where he later took up a job as Media Advance Officer in May 2004. Manganiello goes on to describe that he worked for the municipal campaign of Benoit Corbeil in 1993. Later, in 1997, Corbeil had Manganiello do logistical work for the Liberal Party in Quebec. Manganiello testified that Corbeil then put him on the Pluri Design payroll,
“I would say late — early fall — early fall 1998, Mr. Corbeil walked into my office and informed me that the Liberal Party was in dire straits financially and he wasn’t sure if they would able to continue paying my salary. However, he also assured me that — not to worry, that he would do everything possible to keep me on the payroll and to keep me working at the Liberal Party because my job was required — was essential for all the administration. … I would say maybe several days later or a week later, I was informed by Mr. Corbeil that Pluri Design would assume my salary. They would be paying my salary, but I would continue working at the Liberal Party. … I did not find anything bizarre. I was happy that someone had assumed my salary because I thought I was going to loose my job at the Liberal Party. But, again, he was my superior. So when he approached me and told me that Monsieur Corriveau of Pluri Design would pay my salary, I just assumed everything is okay and I knew Monsieur Corriveau was being someone involved with the Liberal Party. I met him in 1997 in my role in logistics. So I didn’t think anything of it.”
Manganiello went on to testify that he was paid $32,000 more via Pluri Design for what he described as basically the same duties as before.
On page 300 of his phase 1 report, Judge Gomery writes,
The combination of Mr. Brault’s testimony, which I find to be credible, about payments made by Groupaction to PluriDesign for no consideration other than Mr. Corriveau’s political influence, with the admission made by Mr. Corriveau to Mr. Dezainde, leaves me with no alternative but to conclude that Mr. Corriveau was at the heart of an elaborate kickback scheme, according to which at least some of the sums of money paid by Groupaction to PluriDesign, on the strength of false invoices, were used by Mr. Corriveau to the advantage of the LPCQ, by salaries paid to its employees, by services rendered by PluriDesign employees to the LPCQ , or otherwise. The consideration for these payments was the influence of Mr. Corriveau in obtaining sponsorship contracts for Mr. Lemay’s companies which were, at Mr. Corriveau’s request, managed by Groupaction.
One of the ways in which Mr. Corriveau used the sums received from Groupaction for the advantage of the LPCQ was in putting LPCQ employees on the PluriDesign payroll. Documentary evidence forced Mr. Corriveau to admit that three full-time LPCQ workers, Gaetano Manganiello, Philippe Zrihen and Jean Brisebois, were remunerated a total of $82,812.27 by PluriDesign in the years 1998 to 2000, inclusively. Messrs. Manganiello and Zrihen were on the PluriDesign payroll starting November 1, 1998, and Mr. Brisebois was added on October 4, 1999. None of these people worked in fact for PluriDesign.
Of course, this raises some important questions for Bob Rae.
Why did he think to hire these Liberal party operatives? Did he know that these men gave testimony before the Gomery inquiry? Iacono and Manganiello went on to work for Bob Rae’s leadership campaign.
After going through the drama of the Sponsorship Scandal and having an electorate focused upon ethics, why would Rae’s campaign involve these two in his leadership bid?
What should our perception be of a Liberal who hires campaign workers, after testimony given at the Gomery inquiry describing either false invoices or payment made by a third party for political work done?
What does this say about Bob Rae’s judgment?
Would Rae say that it’s dishonest for a campaign worker to submit an invoice for campaign services to someone other than the campaign with a false description of services provided?
Stephane Dion welcomed Marc Andre Cote back to the Liberal Party. Cote was originally banned from the party for receiving sponsorship funds. Dion flip-flopped on Cote, are we to conclude that the receipt of sponsorship funds does not disqualify one from being a party operative in Stephane Dion’s Liberal party? The Cote and Iacono/Manganiello examples just raise further questions.
Is anyone working on Bob Rae’s current campaign tainted by the sponsorship scandal?