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INDEPTH: SPONSORSHIP SCANDAL
Follow the money
CBC News Online | Updated May 17, 2005

In recent weeks, the Gomery inquiry has heard mounting evidence that money paid to ad agencies through the federal sponsorship program was bounced back to the Liberal Party of Canada's Quebec wing.

Justice John Gomery

Jean Brault, former ad executive of Groupaction, testified he transferred $1 million to the party in exchange for sponsorship contracts. Brault's explosive testimony set off a series of denials and counter-denials. But there have also been testimony and documents that have supported some of the allegations.

What is emerging is the existence of a parallel system of underground and unreported fundraising activities outside the party's control.

Daniel Dezainde, former director general of the Quebec wing, testified he was introduced to the "real boss" of this covert fundraiser network, Joe Morselli. Morselli is a friend and long-time organizer for Alfonso Gagliano, public works minister during the sponsorship program years.

Benot Corbeil, another former director general, backed up the allegations.

Did elected officials know and condone this? The full picture is not yet clear. Here is a review of some of the recent testimony about the money trail.

Chuck Guit: bureaucrat in charge of the federal sponsorship program

Chuck Guit (CP Photo/Paul Chiasson)

Makes no mention of illicit payoffs but says ad firms who run election campaigns expect favours.
Refuses to take the blame for all that went down in the sponsorship program.
Says he took orders from his political masters, the Prime Minister's Office and Alfonso Gagliano.
Gives examples of political interference to award contracts to Liberal firms.
Was paid $1 million by ad firms for his lobbying efforts after he left the public service
Never registered as a lobbyist.
Denies he instructed ad agencies to pad their invoices.

Jean Brault:

Jean Brault (CP file photo)

Funnelled $1.1 million to the Liberal Party of Canada – witnesses have given various accounts but there is supporting testimony from former party officials.
Agreed to put Liberal campaign workers on his payroll to disguise the source of their income, including $7,000 a month for a year to Liberal party worker John Welch.
Paid secret commissions to Jacques Corriveau's firm Pluri-Design as a kickback to the party.
Sent $63,500 to a numbered company controlled by lobbyist Alain Renaud who, in turn, sent the money to the Liberal party in the form of a donation. Documents confirm transaction.
Gave $25,000 cash to Joe Morselli at a Christmas gathering for the party in 2001.
Sent $79,000 to the Liberal party or its workers disguised through payments from a subsidiary company owned by Bernard Thiboutot, Commando Communications. This is corroborated by witnesses, Thiboutot, and a paper trail of cheques.
Was told by Chuck Guit to send $50,000 to ad firm Groupe Everest for provincial Liberal Leader Jean Charest's campaign in 1998. Denied by Chuck Guit and Claude Boulay, head of Everest. Boulay says the $50,000 cheque was for a real estate deal between him and Brault.
Paid $1 million to Liberal lobbyist Alain Renaud to open doors in Ottawa.
Was asked for $400,000 for the party by Benoit Corbeil but negotiated down to $60,000.
Paid $50,000 in cash to lobbyist Alain Renaud that was meant for the party.
Says he took $5,000 cash to a Montreal restaurant and left it on a table for Joe Morselli. One of four or five payments to be delivered to Liberal organizer, Beryl Wajsman, a Liberal fundraiser who allegedly took part in this secret fundraising network. Wajsman denies he ever took any cash.
Gave $100,000 to the Parti Qubcois over a two-year period by asking 17 employees to donate, saying he would then reimburse them. Denied by the Parti Qubcois. Says it only found four $200 cheques from Brault.
Promised $100,000 to Joe Morselli to derail a project with the Department of Justice on the registration of handguns. Competition process was delayed. Only half of the cash was delivered in the wake of the auditor general's report, which questioned Groupaction's dealings in the sponsorship program.
Gave $166,000 in legal contributions to the Liberal party's Quebec wing between 1996-2002.
Paid $400,000 to Alain Renaud to cover his expenses for his "volunteer" work with the party.

Alain Renaud: paid lobbyist hired by Brault to drum up government business

Alain Renaud

Renaud denied receiving cash payments for himself or the party.
Could not produce any documents because they were destroyed when his house was flooded.
Says Brault gave $30,000 to Jean Chrtien in1993 election campaign.
Confirmed he was paid generously by Brault to lobby Ottawa for sponsorship contracts.

Michel Bliveau: former director general, Liberal party, Quebec wing

Solicited between $250,000 and $300,000 from Corriveau during 1997 election campaign.
Received between $75,000 and $100,000 cash in an envelope in 1997 from Corriveau. Transaction was never entered in the party's books. "I didn't even ask for a receipt," he told the inquiry.
Admits practice violated election laws.
Takes full responsibility for this "error in judgment."
Says he did not inform Chrtien.
Says he gave the envelope to Benot Corbeil, his assistant.
Assumes the balance, up to $200,000, was sent to Liberal organizer Marc-Yvan Ct.
Says he did not pocket "one cent" of the money.

Benot Corbeil: former director general, Liberal party, Quebec wing

Benot Corbeil

Denied receiving between $75,000 and $100,000 from Michel Bliveau in 1997.
Maintains he only received two cash payments from Bliveau in 1997, one for $5,000 for MP Denis Coderre's Bourassa riding, and $4,000 for Yvon Charbonneau's eastern riding of Anjou-Rivire-des-Prairies.
Confirmed he got $50,000 from Brault through Commando Communications Marketing and $50,000 cash to pay eight Liberal workers during 2000 election.
Corbeil's allegations spur a series of denials from campaign workers, including Daniel Dezainde who testified he never received $3,000 cash.
Claims Gagliano knew about underground fundraising scheme.
Denies pocketing any money for his personal use.

Marc-Yvan Ct: Liberal organizer for eastern Quebec ridings

Confirmed he received $120,000 cash in three instalments from Michel Bliveau to cover the expenses of candidates in 1997 election but no payments for the 2000 election.
Says he took the cash in 1997 and distributed it to election workers.

Daniel Dezainde: former director general, Liberal Party of Canada, Quebec

Daniel Dezainde (CP Photo/Francois Roy)

Discovered a parallel underground network of funding activities when he took the job in 2001.
Money was not registered in the party's books.
Was introduced to Joe Morselli as the "real boss" of fundraising and Beryl Wajsman, his fundraiser.
Fired Wajsman for unauthorized fundraising on behalf of the party.
Says Gagliano referred him to Morselli or chief of staff, Jean-Marc Bard, for the financial needs of the party.
Was worried about testifying because of previous threat by Morselli.
Says Corriveau told him in 2001 that he set up a kickback system to funnel sponsorship money to the party's Quebec wing.

Jacques Corriveau: former head of Pluri Design, longtime supporter of Chrtien

Jacques Corriveau

Admits getting about $8 million in commissions on sponsorship projects.
Admits he never registered as a lobbyist.
Says he never made illegal contributions to the party.
Said he got kickbacks from sponsorship money that was never transferred to the Liberal party.
Denies asking Brault to hire campaign workers.
Admits there were 21 telephone calls between him and Chrtien between 1996 and 2003.
"Sponsorships never came up."

Beryl Wajsman: former Liberal fundraiser

Denies taking an envelope stuffed with $5,000 from Brault. "There was no money exchanged, there was no envelope."
Called Dezainde "a racist" for not allowing members of ethnic communities to sit on party's commissions.

John Welch: chief of staff to Canadian Heritage Minister Liza Frulla

Confirms he was paid $7,000 a month for a year by Groupaction to basically do nothing and attend Liberal functions. "I was hired almost like a poodle to go to these functions."
Doesn't know whether this was at the request of the party.

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MAIN PAGE TIMELINE OF RECENT EVENTS
GOMERY REPORT: PHASE TWORESTORING ACCOUNTABILITY HIGHLIGHTS FAQs FULL REPORT REACTION QUOTES
GOMERY REPORT: PHASE ONEFULL REPORT MAJOR FINDINGS HIGHLIGHTS WHO KNEW WHAT REACTION KEY QUOTES ANALYSIS: Liberals' worst fears ANALYSIS: How did it go so wrong?MONTREAL REACTS: Tracey Madigan's Online Diary
GALLERIES:Who's who photo gallery Cartoon gallery: Phase One report Cartoon gallery: Auditor general's report
GOMERY INQUIRY:Gomery: The players Gomery: Key Companies Gomery by the numbers A summary of the testimony Testimony 2004 Follow the money Kroll report (pdf)
PLEA TO THE NATION:Paul Martin's televised address Stephen Harper's response Jack Layton's response

Gilles Duceppe's response (RealVideo runs 5:59)
KEY WITNESSES:
CHUCK GUITÉ'Not all my fault'From bureaucrat to lobbyist 'No phoney invoices'
PAUL COFFIN'Phoney invoices'
JACQUES CORRIVEAU:At the centre of the storm
ALAIN RENAUD:Lobbyist extraordinaire
JEAN BRAULT:Cash for contracts Paper trail
PAUL MARTIN:Not in the sponsorship loop
JEAN CHRETIEN:Economics and golf balls Editorial reviews
VIEWPOINT:Rex Murphy: Sell the Peace Tower to Wal-Mart?Ira Basen: Watergate, the sponsorship scandal and the press
HISTORY:Ad firms and liberals In their own words
RELATED:The top 10 Canadian government scandals Public inquiries Auditor General's report 2004 Jean Chrétien Paul Martin

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Gomery Inquiry into the Sponsorship Program

Public Works internal audit on sponsorship program, August 2000 [PDF file]

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