Gagliano recalled from Denmark

By ALLISON DUNFIELD and DARREN YOURK
Globe and Mail Update

Prime Minister Paul Martin moved quickly to limit damage from the
Auditor-General's report on Tuesday by ordering Alfonso Gagliano home from
his post as Canada's ambassador to Denmark and calling an public inquiry.

"The assignment of Alfonso Gagliano as ambassador to the Kingdom of
Denmark has been withdrawn," a statement from the Foreign Affairs
Department reads. "Mr. Gagliano has been asked to return to
Canada."

The former minister of public works oversaw the scandal-plagued sponsorship
program at the centre of Auditor-General Sheila Fraser's investigation from
1997 to 2002. Foreign Affairs Minister Bill Graham said he informed Mr.
Gagliano of the decision Tuesday morning. "It is clearly not
appropriate for him to continue as our ambassador," Mr. Graham told
reporters. "Therefore I informed him this morning he was being
withdrawn from his post. He said he understood and he would be making the
necessary to return to Canada."

The federal government and Mr. Gagliano were at loggerheads Monday night
over Ottawa's efforts to oust him from his posting to Copenhagen. Federal
sources said that Mr. Gagliano was "not co-operating" in the
talks and said they believed he would probably sue Ottawa if fired. Mr.
Graham said Mr. Gagliano gave no indication Tuesday that he would take
legal action against the federal government.

As Ms. Fraser's report was tabled in the House of Commons, Mr. Martin held
a press conference to announce a number of measures to ensure that such a
scandal never happens again. But he also absolved himself of
responsibility, saying that because the scandal took place during the
government of former prime minister Jean Chrtien, "I had no idea what
was going on here. I didn't know anything about it."

He pledged to introduce new legislation by the end of March to protect
whistleblowers who come forward to report mismanagement in the Public
Sector, including employees of Crown Corporations. Changes will be made to
the governance of Crown Corporations that fall under Part 10 of the
Financial Administration Act (FAA) to ensure that audit committees are
strengthened. The federal government has also hired Andr Gauthier as
counsel. He has been given a mandate to pursue all possible avenues,
including civil litigation, to recover lost funds.

"There has been a significant breach of the public's trust and our
government is prepared to act," Public Works and Government Services
Minister Stephen Owen said. "Canadians will not tolerate excuses and
they deserve answers."
Treasury Board President Reg Alcock said the government will act decisively
on Ms. Fraser's report and described himself as "deadly serious about
cleaning this up."


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