Month: January 2006

Claude Dauphin was a Quebec Liberal MNA for the riding of Marquette in 1981 and was re-elected in 1985 and 1989. He served as an MNA until 1994. In 1995 he was the president of Option Canada. He was the chief Quebec advisor to Paul Martin when the current Prime Minister was Minister of Finance in 1997. In 2001, Dauphin was elected as a city councillor in Lachine and currently serves as the Montreal borough’s mayor after he was elected in November 2005.

Claude Dauphin and Option Canada have been at the centre of controversy before. Gilles Duceppe and other sovereigntists questioned a transfer of $4.8 million from the Ministry of Heritage to Option Canada in circumvention of the laws governing spending on the Quebec 1995 referendum. According to a November 20th, 1997 Montreal Gazette article, the secretive Option Canada had originally requested $10 million.

In the 1995-96 transfer payments summary, on page 8 of 82, under a section titled “Grants to organization representing official language minority communities, non-federal public administrations and other organizations for the purpose of furthering the use, acquisition and promotion of the official languages”, a $4,810,000 payment to Option Canada from Montreal, Quebec is listed.

Heritage Canada doled out the amount in three distributions, one of which for $300,000 seems to have gone missing.

As Angry in the Great White North reports, Heritage Canada called in the Mounties after learning about the upcoming book of an investigative journalist.

However, an official at Canadian Heritage said the department called in the police after hearing that Option Canada was the focus of an upcoming book by Quebec investigative journalist Normand Lester.

Various information led us to believe that there were possible irregularities in the management of federal funds and it’s in that optic that we asked the RCMP to look more closely at the matter,” Heritage spokesman Jean-Guy Beaupré said.

Another investigation into Option Canada was earlier conducted by Quebec’s chief electoral officer Francois Casgrain.

The report also states that Option Canada may have been a “bogus firm,” set up by its parent organization, the Council for Canadian Unity, to avoid problems with Revenue Quebec and Revenue Canada.

In fact, this makes sense as the CCU is a think-tank that would lose tax-exempt status if it were to directly engage the separatists. Thus, a shell corporation was formed and was named Option Canada.

Casgrain remarked:

“One cannot help but wonder,” he wrote, “whether Option Canada was ever in fact operational, instead of merely a bogus firm (‘une compagnie bidon’) whose sole purpose was to assume (referendum) expenses already incurred by the Council for Canadian Unity, thereby providing the accounting loophole that would calm Revenue Quebec and Revenue Canada.”

The Globe and Mail casts further doubt upon Option Canada and regular accounting procedures:

An internal review at Canadian Heritage criticized the disbursements, saying the process “lacked the rigour and scrutiny one would expect for such large sums of money being given to an unproven client.

In fact, in the past, Dauphin has all but confirmed the dodgy nature of the faux-enterprise that channelled millions from Heritage Canada to Quebec ad firms (one of which was BCP, the role of which was investigated and reported upon by Justice John Gomery).

According to the Gazette,

The detail of Option Canada’s activities remain a mystery. Its founding president, Claude Dauphin, who declared himself an early contender for Warren Allmand’s federal seat in N.D.G., couldn’t recall in a Feb. 28 interview what it was that Option Canada did during the campaign.

According to Dauphin, Option Canada’s president, the corporation was CCU’s “political arm.”

Pressed to explain how it was possible that he didn’t know what its role was during the campaign, Dauphin shrugged and replied: “Just because I lent my name as president doesn’t mean I ran the company.”

Here, Dauphin distances himself from Option Canada after questions arise surrounding its potentially illegal conduct during the 1995 referendum. The truth remains however, that Option Canada did indeed exist if only as a shell corporation and did indeed channel $4.8 million from the federal treasury to various destinations. About $2.6 million of this money went to the Quebec ad firm BCP and other amounts remain unaccounted for today. According to today’s Globe and Mail, the RCMP may have initiated the review to investigate $300,000 in misdirected money.

Why is this important in the current context of the election?

• This brings Adscam back into the spotlight
• The RCMP is investigating the Liberals on another scandal
• Dauphin is closely linked to Paul Martin
• This makes Martin’s claims of ignorance towards Adscam increasingly unbelievable.

Ironically, Dauphin described his former boss Paul Martin prior to the 2004 federal election:

“Son style est différent, explique-t-il en entrevue téléphonique. Probablement que M. Chrétien aurait dit, comme il l’a déjà fait: ‘allez donc faire du faire du ski alpin, ne pensez pas à ca’. M. Martin, lui, a pris le taureau par les cornes et il a dit: ‘avec des enquêtes, on va trouver les coupables pour montrer aux Canadiens qu’on prend ca au sérieux’. Certains peuvent dire que stratégiquement, c’était en quelque sorte amplifier le dossier, mais je crois qu’apràs mure réflexion, les Canadiens vont regarder ca et dire: ‘il essaie vraiment d’aller au fond des choses’.”

(“His style is different”, Dauphin explains in a telephone interview. “Mr. Chretien probably would have said “Go skiing, don’t think of it”. Mr. Martin took the bull by the horns and he said, ‘regarding the investigations, we’ll find the guilty parties to show Canadians that we take things seriously’. Some can say that strategically, it was to some extend to highlight the file, but I believe that after careful consideration, Canadians will look at this and say: ‘he’s really trying to get to the bottom of things.'”)

Continuing his trend to encroach upon provincial jurisdiction, Paul Martin will announce later on today that the Liberals are planning to unload over $7 billion on education initiatives.

CTV has the report:

Thousands of low-income students would get virtually free university and college educations under a multibillion-dollar plan to be unveiled Thursday by Prime Minister Paul Martin, The Canadian Press has learned.

The plan, aimed at ensuring Canada will be able to compete with emerging economic superpowers like China and India, includes the promise of at least $2.75 billion in new post-secondary tuition assistance.

Sources said every student, regardless of income, would get some new financial help to defray tuition fees, but low-income students would be the biggest beneficiaries of the new plan, receiving up to $3,000 a year for four years.

As well, Martin is expected to announce an additional $1 billion to help universities and colleges build new infrastructure.

And he is expected to simultaneously unveil a workplace skills strategy, promising to pump $3.5 billion into programs aimed at boosting apprenticeships, skills development and literacy, as well as encouraging increased participation in the workforce by aboriginals, immigrants and the disabled.

First impression? The Liberals are buying votes in a time of crisis.

However, on closer inspection, doesn’t the Liberal plan sound familiar?

Oct 06, 2004

In Tuesday’s Speech from the Throne, Prime Minister Paul Martin failed to make mention of a key election promise, according to the Canadian Federation of Students and the Fédération étudiante universitaire du Québec. During a nationally-televised federal election forum in St. John’s, Newfoundland, Martin said that he wanted to allocate $8 billion to post-secondary education.

“We are extremely disappointed that the Prime Minister chose not follow through on an election promise,” said George Soule, National Chairperson of the Canadian Federation of Students, “The Prime Minister is wrong if he thinks that students have forgotten about a $8 billion promise he made on June 4, 2004.”

The same type of promise was made by Paul Martin in the 2004 campaign and it certainly sounds like something that the NDP would have supported in the so-called “NDP budget” last spring. Did you say $8 billion for education, Mr. Martin? That certainly trumps the $4.6 Billion that Buzz Hargrove negotiated for the NDP’s participation in propping up a corrupt Liberal government.

However, if we we neglect to take the promise at actual value ($0) and focus on the votes that could be bought with a promise to spend $7 billion on education, it may well be a waste of phoney money for the Liberals.

Apparently, the Liberal war room leaked the announcement early thus negating any purpose for reporters to follow the Martin campaign at a rate of $1500 per day. CTV Ottawa bureau chief Robert Fife was livid:

“When we arrived in Calgary tonight, all our BlackBerries went off, and all the journalists who are paying $10,000 a week were furious … Scott Reid had to come to the back of the plane and he got a tongue-lashing from the journalists who wondered why we’re covering this campaign when we could sit in Ottawa and wait for the leaks to come out … This is really quite a serious setback for the Liberals because a) it shows they can’t run a campaign properly, and secondly, it shows a huge announcement, a big, important announcement on education that the Prime Minister was going to use has been upstaged by a leak from the Liberals.”

Will media outrage overshadow Martin’s announcement? Is it this type of behaviour from the Liberal campaign that is turning media favour to benefit the Conservatives?

Remember that so-called “damning” Harper speech from 1997 that was supposed to dog the Conservative leader throughout the campaign? It immediately lost its legs when it was revealed that the “anonymous non-partisan source” got his marching orders from the Liberal war-room. This too before the “non-partisan anonymous source” helped Martin prepare for the debates in Vancouver last month. That incident, many media observers will note, represented a turning point for the Liberal party regarding media credibility (and sympathy).

It has yet to be seen whether or not reporters will call the Liberals on their phoney $7 billion education announcement later today.

If Bob Fife’s mood is any indication, they probably will.

I’d like to believe that Ralph Goodale is a honest politician and that he has served 32 years in public life with integrity, I really would. However, let’s look at Goodale’s previous connections to scandal in Ottawa now that he is starring in the latest.

First, a timeline of Goodale’s career:
1974-1979 – Backbench Liberal MP
1981 – Leader of Saskatchewan Liberal Party
1986 – only Saskatchewan Liberal to be elected to provincial legislature
1988 – ran in federal election (lost). Executive assistant was Jason Kenney
1988-1993 Private sector: Pioneer Life Assurance Company, Pioneer Lifeco Inc., Sovereign Life Insurance Co.
1993 – elected as MP, Chretien cabinet minister of agriculture and agri-food
1997 – Minister of Natural Resources
2002 – Minister of Public Works and Government Services
2003 – Paul Martin becomes PM and Goodale becomes Minister of Finance

Auditor General Sheila Fraser uncovered the Sponsorship Scandal and released a scathing report of Liberal corruption. Justice John Gomery was given a mandate to look into the report and investigate political direction and what went wrong. However, he did not have the mandate to look at chapter 5 of Fraser’s report which details many of the same type of “sole-sourced”, non-competitive contracts that occurred between the government and Quebec ad firms. However, chapter five deals with the same type of suspect contracts between the government and Martin-connected Earnscliffe.

In a March 27th, 1995 letter to David Dingwall (then Minister of Public Works and Government Services), Ralph Goodale (then Minister of Agriculture) asked for a special favour:

In order to respond to the issue in time our department will need to sole source a contract to conduct the necessary survey and analysis work amongst both the general prairie public and the farm population. I wish to contract with The Earnscliffe Strategy Group to conduct this survey which will cost under $50,000. The company’s knowledge of the policy file gained from previous research permits the rapid turnaround on issues such as methodology and issues to be explored during the survey. Also, the primary consultant to be involved is from Saskatchewan and has an excellent background in prairie agriculture.

A sole source contract to Earnscliffe? The primary consultant is from Saskatchewan? The primary consultant was likely David Herle who it turns out, was Ralph Goodale’s driver and a close aide when Goodale was leader of the Saskatchewan Liberal Party.

David Dingwall responded (July 25th, 1995), shutting down Goodale’s hope of setting up a sole source contract for a friend.

Agriculture and Agri-food Canada officials have demonstrated a pattern of non-compliance and avoidance during the year since the Treasury Board approval of new policies concerning this type of project (Attachment A). Submissions have been received often after RFPs have been issued or competitions are complete. Contracting has been undertaken by Agriculture Canada itself instead of by PWGSC as required under the Contracting Policy. Some competitions have used a limited list instead of the open system required for contracts over $30,000.

In addition, three projects have been funded through “contributions” I am concerned this method of funding could become a means to avoid the normal procedures for public opinion research.

My Department has made efforts to inform Agriculture and Agri-food Canada officials of the policies. It would be helpful if you could reinforce these efforts along with the concern about contribution arrangements for public opinion research.

In a July 28th, 1995 memo from Chuck Guite, the Director General of Advertising and Public Opinion (Research Sector) to Warren Kinsella (then the executive assistant to the office of the Minister of PWGC), Guite complains about a contract issued to Earnscliffe:

POR (Public Opinion Research) indicated to the client that the “scope of work” was vague and written in a way that favoured the incumbant. Also attached is the results of the OBS process and as you can see, 17 firms requested the tender documents but only one bid was submitted which was by the Earnscliffe Strategy Group. Unofficial comments were received by the Public Opinion Research area of my organization, that the scope was unclear and bias to one firm, so why waste time and money on a bid that they had no chance of winning.

Sound familiar? This was what was happening in Quebec with no-competition contracts awarded to Liberal friendly firms for little to no work. Here we see the same but by Martin’s people (Earnscliffe). Note that these contracts were issued by Finance. (Paul Martin was the Minister of Finance).

Note that while this doesn’t specifically address Goodale’s sole source contract request, it was this type of non-competitive awarding of contracts to Earnscliffe that Guite discusses here. Perhaps Goodale was lucky that his request was rejected by David Dingwall.

So, we have evidence of suspicious contracting practices by the department of finance and by Earncliffe (David Herle). Remember that Herle is a close friend of both Martin and Goodale.

Conservative MP James Moore questioned Goodale about this in the House of Commons:

Mr. Speaker, long time Liberal Warren Kinsella sent a memo in 1995 to the public works minister setting out $615,000 in government contracts that were given to the Prime Minister’s friends at Earnscliffe in violation of cabinet guidelines.

David Herle, who was the Prime Minister’s campaign manager, worked at Earnscliffe and received this money after the Prime Minister as finance minister insisted that David Herle and Earnscliffe receive the contracts.
The Prime Minister has two choices. He can rise in his place and admit that he directed cash to his friends or rise and call Warren Kinsella a liar. Which is it?

Selon M. Kinsella, ce premier ministre a accordé des contrats à ses amis, en particulier ses amis à Earnscliffe, dans les années 1990, comme Scott Reid qui est aujourd’hui son directeur des communications, et David Herle, le chef de sa campagne au leadership.

(According to Mr. Kinsella, this Prime Minister granted contracts to his friends, particularly his friends at Earnscliffe, in the 90s, like Scott Reid who is today his director of communications, and David Herle, the head of his leadership campaign.)

Comment le premier ministre peut-il continuer de jouer ce jeu jeux avec la vérité concernant l’octroi des contrat? Comment?

(How can the Prime Minister continue to play this game with the truth concerning the granting of contracts?)

Kate, from SDA reminds us of an excerpt from the Globe and Mail where Ralph insisted that there wasn’t any rigging of contracts:

“Why does the government not just admit . . . the Prime Minister abused the process to get contracts to his friends at Earnscliffe, to his campaign manager David Herle?” Conservative Leader Stephen Harper said. “Why does he not just admit that he got public money to his political associates?”

Deputy Prime Minister Anne McLellan and Finance Minister Ralph Goodale jumped to Mr. Martin’s defence as opposition MPs chanted “where’s Paul” — a reference to the Prime Minister’s empty Commons seat. Aides said that Mr. Martin was meeting with foreign ambassadors and representatives after the government released its new policy paper on foreign affairs.

Mr. Goodale insisted that an independent audit by accounting firm Ernst and Young in 1997 and the Auditor-General’s review in the 2003 had found no rigging of contracts.

Let’s fast-forward to the current scandal of income trusts, a scandal that surrounds Ralph Goodale and his announcement on the non-taxation of these investments. One of the people at the meeting of the executive committee of the Investment Dealers Association of Canada (IDA) was Goodale confidant Donald Black, a director of Greystone Managed Investments Inc. that manages the Hartford Growth and Income Fund, a fund that has significant investments in income trusts. Angry in the Great White North has more:

Finance Minister Ralph Goodale had an hour-long meeting with senior representatives of Canada’s investment community — at which the issue of income trusts was discussed — only hours before his decision on the issue was announced, CanWest News Service has learned.

An official in Mr. Goodale’s office confirmed yesterday that the previously undisclosed meeting with the executive committee of the Investment Dealers Association of Canada (IDA) took place, but said those who attended left the morning meeting “no wiser” about the decision that was announced later that day after markets closed.

So, how close are Goodale and Black? Greystone Capital Management is based out of Regina, Saskatchewan. Black ran Pioneer Life Insurance and gave Goodale a senior position in the firm during his brief stint in the private sector. According to some sources, Goodale was appointed this senior position to allow the now Minister of Finance to continue working on his political ambitions.

How might have Goodale reciprocated? Well, the events aren’t officially related, but Goodale appointed Black to be the head of Farm Credit Corporation (based out of Regina) in 1995.

As I’ve previously written, it is beneficial to be a Liberal in the province which seems devoid of Liberal representation. Virtually all federal judges appointed from Saskatchewan between 1993 and the present have been Liberal donors. The former law firms of these judges have been kind to the Grits as well. Indeed, in a province that elects the NDP provincially and Conservatives federally, it is beneficial to be connected to the Liberal party. Ralph Goodale represents the foundation for the gilded straw palace that is the Liberal Party in Saskatchewan.