Three Crown presidents punished in scandals

By ALLISON DUNFIELD
Globe and Mail Update

Three senior officials at Crown corporations were suspended from their jobs
Tuesday by Prime Minister Paul Martin: two in connection with the
sponsorship scandal and another in connection with a separate case.

Mr. Martin announced that the president of the Business Development Bank of
Canada, Michel Vennat, and the president of Via Rail, Marc Lefranois, have
been suspended without pay until March 1. A third senior official, Andr
Ouellet, president of Canada Post, was suspended with pay pending the
results of an internal audit of the Crown corporation.

"Simply put, obviously confidence in the Crown corporations is
absolutely vital, both to the government and for Canadians. And in the end,
the public interest must dominate," the Prime Minister said. Mr.
Martin said Mr. Vennat was suspended largely because of his actions in the
so-called Shawinigate scandal, not because of BDC involvement in the
sponsorship controversy. A recent court ruling by a Quebec Superior court
justice criticized Mr. Vennat for leading what appeared to be a nasty
campaign against former BDC president Franois Beaudoin after he suggested
the recall of a controversial loan for which former prime minister Jean
Chrtien had lobbied.

Mr. Vennat will have until March 1 to convince the government why he should
not face further discipline. Mr. Lefranois was also given until March 1 to
"have an opportunity if he desires to respond and to indicate why
there should be no further measures taken," Mr. Martin said.

The BDC, Via Rail and Canada Post were among the five Crown corporations
named by the Auditor-General in her report on the sponsorship scandal. The
Prime Minister made the announcements Tuesday after meeting with his
Liberal cabinet in Ottawa and hearing recommendations from his Treasury
Board President Reg Alcock, who was asked to review the matter. "We
reviewed these decisions very carefully," Mr. Martin said.

At a later press conference, Treasury Board President Reg Alcock said that,
during his review of the Crown corporations, he was guided by three
questions: "Was there evidence that senior management was directly
involved in inappropriate practices? Was the response from senior
management attentive and swift? Was there evidence of other management
practices that would give rise to concerns?" When asked why the
government should not immediately fire the presidents, Mr. Alcock answered:
"They are on notice that we have very serious concerns about some of
their activities, but, you know, one has to give due process. One can't
prejudge these things. So they're coming in, they'll present their side of
the case and then we'll make a decision."

Public accounts committee

Meanwhile Tuesday, the public accounts committee--the parliamentary
committee charged with investigating the sponsorship scandal--agreed
Tuesday to call former public works minister Alfonso Gagliano as its first
witness. He is to appear before the committee on Thursday.  Mr. Gagliano
was public works minister during the time that the Auditor-General
pinpointed as when problems occurred in the department's sponsorship
program.

John Williams, chairman of the public accounts committee, said he hopes the
appearance of the former minister will help the committee get to the bottom
of the sponsorship scandal. "I expect and hope that we get
some...answers from the minister when we hear from him on Thursday,"
Mr. Williams told CBC Newsworld.

The sponsorship program was set up in 1995 to raise the profile of Canada
in Quebec after the Quebec referendum. Auditor-General Sheila Fraser found
in her report, however, that five Crown corporations  Via Rail, Canada
Post, the Business Development Bank of Canada, the Canada Mortgage and
Housing Corp., and Montreal's Old Port  were enlisted to funnel cash to
Liberal-tied ad firms. However, on Tuesday, Mr. Martin said after reviewing
the response of Montreal Old Port Corp. since the Auditor-General's report,
the government is satisfied that it took the necessary action to fix
problems.

The committee also agreed to release the names of employees in the Crown
corporations who authorized the transactions criticized in Ms. Fraser's
report. They received lists from Canada Post and the Montreal Old Port
Corp.
The list will not be released until the committee meets again on Thursday.


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