Sponsorship scandal

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The sponsorship scandal, "AdScam", or Sponsorgate, is an ongoing scandal that came as a result of a Canadian federal government "sponsorship program" (sometimes capitalized) in the province of Quebec, originally rationalized as an effort to raise Canadian patriotic sentiments to counter Quebec separatism. The program ran from 1996 to 2004, when broad corruption was discovered in its operations and the program was discontinued. Illicit and even illegal activities within the administration of the program were revealed, involving misuse and misdirection of public funds intended for government advertising in Quebec. The resulting investigations and scandal have affected the Canadian government, particularly the Liberal Party of Canada and the now former government of Prime Minister Paul Martin. It has been an ongoing affair for years, but rose to great national prominence in early 2004 after the program was scrutinised by the federal auditor general and later became the subject of a dedicated federal commission. It remains in the national spotlight and became a significant factor in the lead-up to the 2006 federal election where the Liberal Party of Canada was ousted from power by the Conservatives who formed a small minority government that was sworn in on Monday, February 6, 2006.


Involved parties

  • Jean Chrétien — Prime Minister of Canada at the time the Sponsorship Program was established and operated. The Gomery Commission, First Phase Report which assigned blame for the Sponsorship scandal cast most of the indemnity for misspent public funds, fraud on Chrétien and his Prime Minister's Office staff.
  • Jean Pelletier — Prime Minister's chief of staff, later head of VIA Rail, who was accused of mishandling sponsorship deals.
  • Alfonso Gagliano — Minister of Public Works, and thus in charge of the program. Also the political minister for Quebec.
  • André Ouellet — Member of Chrétien's Cabinet, longtime Liberal politician and later head of Canada Post, who was also accused of violating sponsorship rules.
  • Chuck Guité — Bureaucrat in charge of the sponsorship program. Arrested for fraud by the RCMP.
  • Jean Brault — Head of Groupaction Marketing, one of the companies to which deals were directed. Arrested for fraud by the RCMP.
  • Jacques Corriveau — Liberal organizer and head of Pluridesign to which millions in sponsorship dollars were directed.
  • Paul Martin — Former Prime Minister of Canada who stopped the sponsorship program as soon as he became Prime Minister and set up the Gomery Commission which has uncovered the details of the scandal. Martin was Minister of Finance, President of the Treasury Board and Senior Minister from Quebec during the early years of the Sponsorship Program (until 2002) however he was explicitly cleared of formal responsibility by Justice Gomery in his November 2005 'First Phase Report' of the Gomery Commission, as his role as finance minister established a 'fiscal framework' but he did not have oversight as to the dispersal of the funds once they were apportioned to Chrétien's Prime Minister's Office. In addition, as mentioned above a report on the issue by the Auditor General's Office of Sheila Fraser came to the same conclusion.
  • Joe Morselli — Liberal Party fundraiser. Jean Brault testified that the money exchanges were with Morselli.



  • February 10Auditor General Sheila Fraser's report reveals up to $100 million of the $250 million sponsorship program was awarded to Liberal-friendly advertising firms and Crown corporations for little or no work.
  • Prime Minister Paul Martin orders a Commission of Inquiry into the Sponsorship Program and Advertising Activities. The Commission of Inquiry will be headed by Mr. Justice John H. Gomery. Martin fires Alfonso Gagliano from his post in Denmark.
  • February 24 — Martin suspends Business Development Bank of Canada president Michel Vennat, VIA Rail president Marc LeFrançois and Canada Post president André Ouellet giving each an ultimatum to defend themselves or face further disciplinary action.
  • February 27 — Past Olympic gold medallist Myriam Bédard reveals she was pushed from her job at VIA Rail for questioning billing practices. VIA Rail chairman Jean Pelletier publicly belittles Bédard and calls her pitiful.
  • March 1 — Pelletier is fired.
  • March 3Jean Carle, a close confidant of Chretien and his former director of operations, surfaces in close connection to the sponsorship initiative.
  • March 5 — LeFrançois is fired.
  • March 12 — Vennat is fired.
  • March 13 — An unidentified whistle-blower reveals that high-ranking government officials, including Jean Pelletier, Alfonso Gagliano, Don Boudria, Denis Coderre, and Marc LeFrançois, had frequent confidential conversations with Pierre Tremblay, head of the Communications Coordination Services Branch of Public Works from 1999 until 2001. The claim is the first direct link between the scandal and the Prime Minister's Office. Coderre and LeFrançois denied the allegation.<ref>Toronto Star article</ref>
  • March 18 — Gagliano testifies in front of the Public Accounts Committee, a committee of the House of Commons chaired by a member from the Official Opposition. Gagliano denies any involvement by himself or any other politician; he points blame at bureaucrat Chuck Guité.
  • March 24Myriam Bédard testifies at the Public Accounts Committee. In addition to repeating her earlier assertions, she also claims that Formula One driver Jacques Villeneuve was given a secret $12 million payoff to wear a Canadian flag logo on his racing suit (however, Villeneuve sharply denies this allegation, calling it "ludicrous"). Bédard also testifies that she once heard that Groupaction was involved in drug trafficking.
  • April 2 — Previously confidential testimony from a 2002 inquiry into suspicious Groupaction contracts is made public. In it, Guité admits to having bent the rules in his handling of the advertising contracts but defends his actions as excusable given the circumstances, saying, "We were basically at war trying to save the country... When you're at war, you drop the book and the rules and you don't give your plan to the opposition."<ref>Globe and Mail insider edition article</ref>
  • April 22 — Guité testifies. He claims Auditor-General Fraser is misguided in delivering the report, as it distorts what actually went on; he claims the office of then-Finance Minister Paul Martin lobbied for input in the choice of firms given contracts; and he denies that any political interference occurred, because his bureaucratic office made all final decisions. Opposition MPs decry his comments as "nonsense" and claim he is covering up for the government.<ref>Toronto Star article</ref> The French language press gives a very different account of Guité's testimony; a La Presse headline states that Guité is involving the Cabinet office of Paul Martin.<ref>Cyberpresse article</ref>
  • May 6 — An official announces the inquiry deadline is set for December 2005.
  • May 10Jean Brault, president of Groupaction, and Charles Guité arrested by the RCMP for fraud in connection with the sponsorship scandal.
  • May 23 — Paul Martin requests that the Governor General dissolve Parliament and call a federal election.
  • May 28 — Alfonso Gagliano launches a lawsuit for $4.5 million against Prime Minister Paul Martin and the federal government for defamation and wrongful dismissal claiming that he has been unfairly made to pay for the sponsorship scandal.
  • June 28 — The Liberals win 135 of 308 seats in the 2004 election, forming the first minority government in almost 25 years.
  • September — First public hearings of the Commission of Inquiry into the Sponsorship Program and Advertising Activities begin in Ottawa. They will move to Montreal in February 2005 and conclude in the Spring.
  • December — In a year-end media interview, Justice John Gomery refers to Chretien's distribution of autographed golf balls as "small-town cheap", which later prompts an indignant response from the former prime minister.


  • March 29 — A publication ban is imposed by the Gomery commission on Jean Brault's testimony.
  • April 2 — The United States blog Captain's Quarters<ref>Captain's Quarters posting</ref> discloses information about Brault's testimony, countervening the Canadian publication ban. Until the revocation of the ban five days later, the publication itself was a news event in Canada, with Canadian news media struggling to report on the disclosure without putting themselves at risk of legal action.<ref>Edmonton Sun</ref>
  • April 7 — The publication ban on Jean Brault's testimony is lifted by the Gomery commission. Brault's testimony triggers a rapid shift in the public opinion of the Liberal Party. Whether or not the government is defeated in the imminent confidence vote, most political pundits are predicting an election call this year—many predicting by this summer.
  • April 20 — The official opposition party, the Conservatives, puts forward a non-confidence motion in the government. Due to procedural rules, this vote which was to be held May 3 was postponed. If a non-confidence motion passes, the government will be dissolved and a new election will be held.


  • April 21 — A national televised appearance by Prime Minister Paul Martin discusses the scandal. This was highly unusual in Canadian politics. The Prime Minister announced that a general election will be called within 30 days of Justice Gomery's final report. Martin emphasised that he was trying to clean up the scandal and had not been involved. In the following rebuttal speeches, Jack Layton of the New Democratic Party offered to keep the parliament alive, provided the Liberal Party makes some major concessions in the budget in their favor. However, the other Opposition parties were still ready to bring down the government and force an election before the summer.
  • May 10 — The Conservatives and Bloc Québécois win a vote, by 153-150, in the House of Commons on what they argue is equivalent to a no confidence motion; three MPs are absent due to health reasons. The motion ordered a committee of the House of Commons to declare that the government should resign rather than being a direct motion on the House's confidence in the government. The opposition parties and several constitutional experts claim that the motion is binding and that the government must resign; the government and several opposing constitutional experts suggest that this motion was merely procedural and therefore cannot be considered a matter of confidence. Ultimately, only the Governor General has the power to force an election, it is not clear what actions tradition would require her to take in such a case<ref>CBC article: Liberals will not quit despite losing vote</ref>.
  • May 11 — The government tells the House that it will consider a vote to be held on May 19 on the budget, including the concessions which the Liberal party ceded to the NDP in turn for their support on it, to be a matter of confidence. However, the Opposition continues a policy of non-cooperation and disruption of the business of the House.
  • May 17 — Conservative MP Belinda Stronach crosses the floor to the Liberals and is simultaneously given the Cabinet position of Minister of Human Resources and Skills Development as well as made Minister responsible for Democratic Renewal. Prime Minister Paul Martin states that Stronach will be responsible for implementing the recommendations of the Gomery commission, a statement that Opposition critics claim casts doubt on the sincerity of the Prime Minister's promise for an election within 30 days of the tabling of Justice Gomery's report. For some time afterwards, media attention is focused away from Gomery testimony onto Stronach's move and its implications on the budget vote.
  • May 19 — The government passes the first of two budget bills easily after the Conservatives promise support, but the second bill with the NDP concessions ends as a cliffhanger. Speaker Peter Milliken breaks a 152-152 tie in favour of the bill, keeping the government alive.
  • November 1 — Gomery's preliminary report into the scandal is released. The report criticizes Chrétien and his office for setting up the sponsorship program in a way as to invite abuse, and Gagliano as the Minister of Public Works for his behaviour. Prime Minister Paul Martin is formally cleared of any responsibility or wrongdoing in the matter as Gomery found his role as Finance Minister was to set up a 'fiscal framework' at the instruction of then Prime Minister Chrétien, but did not have oversight on the spending of the funds after they were passed to Chrétien's Prime Minister's Office.
    Conservative leader Stephen Harper and Bloc Québécois leader Gilles Duceppe announce their intention to try to force a pre-Christmas election; however, New Democrat leader Jack Layton says that he will try to have the Liberals implement some New Democrat policies, particularly with regard to public healthcare as the price for his support in keeping the government up.
  • November 28 — The Liberals refuse to agree to the New Democrats' terms and the latter withdraws their support. As a result, the Liberal government loses a confidence vote in the House by 171 to 133, resulting in the fall of the minority government and triggering a mid-January election after a holiday election campaign that is expected to be dirty and hard-fought.


  • January 23 — After twelve consecutive years in power, the ruling Liberals are defeated in the general election. The Conservatives have enough seats to form a minority government. Paul Martin immediately announces his intention to step down as leader of the Liberal party, and the next day he resigns as Prime Minister.
  • February 1 — Justice John Gomery delivered his final report consisting mostly of recommendations for changes to the civil service and its relation to government.


  • February 6 — The new Conservative government, led by Stephen Harper, are officially sworn in as the new government in Canada. Stephen Harper becomes Canada's 22nd Prime Minister.

Political consequences


The Liberal Party of Canada, for the most part, has weathered the damage from the scandal by pointing out the conclusions of reports of the Auditor General and the Gomery Commission: misdeeds were committed by a small, isolated, and corrupt subculture within the previous Liberal government and in particular the PMO of former Prime Minister Jean Chrétien. Similarly, supporters of Prime Minister Paul Martin have argued that the "culture of corruption" was a byproduct of Chrétien's leadership and that any malicious elements have been purged, both from the government and the party, since the discoveries of wrongdoing.

Since assuming the leadership of the party and the country, Martin has made an active effort to dissociate the Liberals from any individuals implicated in the scandal, hoping to illustrate that the current Liberal Party bears little or no connection or resemblance to party elements involved in the sponsorship program.

Within the Liberal Party during 2004-05, revelations of scandal and the subsequent Gomery Commission highlighted the rift between the "Chrétien camp" and "Martin camp". These two groups had been fighting perhaps even prior Chrétien's election as party leader in 1990; the Chrétienites were descended from the leftist Pierre Trudeau while the Martinites were linked to the right-leaning John Turner. Chrétien supporters have alleged that Martin used the scandal as an excuse to remove Chrétien supporters from their positions in government and the party. Martin supporters contend that many Chrétien loyalists left with or shortly after Chrétien left in 2004, before the scandal was revealed. The departure of John Manley and other Chrétien cabinet ministers from the party, many of whom did not stand for candidacy in the 2004 federal election, is indicative of this assertion. Martin's supporters assert those expunged from the party were ejected for their impropriety and not for their leadership affiliations.

The Chrétien camp also contends that the Gomery Commission was established to make them look bad, and that it was an unfair investigation. Martin supporters respond to such allegations by pointing out that the commission was set up to search for facts under independent judicial oversight. Furthermore, Justice Gomery's commission has operated without undue influence from Martin or anyone outside of the investigation, having all due and necessary authority to investigate and draw conclusions on the matter. However, the commission was specifically directed not to make any conclusions or recommendations on criminal charges or civil liability.

It should be noted that many inside and outside of the Liberal Party contend that, going into the 2006 election, Martin-vs.-Chrétien issues are effectively behind the Liberals. Formally, the two leaders have remained publicly respectful of each other.

Critics of the Liberal Party and even former Liberals, like Sheila Copps, have argued that the sponsorship scandal has highlighted a "culture of corruption" within the Canadian government. Some critics allege that the problems within the Liberal Party are so systematic it can only be effectively reversed by a change of government and argue the Liberals, who had been in power for over a decade, are too arrogant and complacent to be trusted with instituting necessary reforms. The sponsorship crisis thus became a key election issue, and remained a rallying-point for conservative opponents of the Liberals in the 2006 federal election.

Quebec sovereigntists—led by the Bloc Québécois in the federal parliament and the provincial Parti Québécois—have cited the scandal as "proof" of institutional corruption and dysfunctionality of the federal government and of the arrogant attitude of English Canada. Critics have argued that the entire sponsorship scandal, originally intended to encourage pro-Canada sentiment in Quebec, has emboldened separatist forces in Quebec: recent polls indicate increased support for sovereignty, rising to approximately 53% (as of 19 December 2005).

The New Democratic Party (NDP) caucus of Jack Layton has also been criticized for alleging major corruption in the Liberal Party of Canada, while simultaneously working with the Martin government to achieve NDP policy objectives.



  • {{cite book
|title=Who is Responsible? Phase 1 Report 	 
|publisher=Public Works and Government Services Canada 	 
|location=Ottawa, ON 	 
|id=ISBN 0660195321 	 

See also

External links