Auditor-General 'fallible,' witness says

By ALLISON DUNFIELD
Globe and Mail Update

An advertising executive whose agency has ties to the Liberal Party told a
parliamentary committee looking into the sponsorship scandal that the
Auditor-General "is fallible" in her work.

John Hayter, chairman and chief executive officer of Toronto-based Vickers
& Benson, an advertising agency that won a number of lucrative Liberal
contracts as part of the federal sponsorship program, told the public
accounts committee Tuesday that Sheila Fraser does not understand how the
advertising industry works.

Some of the biggest advertising contracts after the Liberals came to power
in 1993 went to companies such as Groupaction Marketing Inc., Groupe
Everest, Le Groupe BCP and Vickers & Benson, which worked on Liberal
advertising campaigns. Mr. Hayter talked about his work in the industry and
told the committee that the Auditor-General did not seem to know the
difference between agency commissions, professional fees and production
costs and interchanged the terms in her report, which he says is
problematic and confusing.

Conservative MP Diane Ablonczy asked Mr. Hayter, "Are you seriously
suggesting that such a professional [the Auditor-General] is completely dim
on the difference between production fees and commissions?" Mr. Hayter
replied: "There is a difference here, and Canadians deserve an
explanation."

He said he was not taking aim at Ms. Fraser personally, but insisted it was
confusing when she used the terms interchangeably in her report. He went on
to say: "The Auditor General is fallible. The problem is, anyone who
takes facts and talks about the Auditor-General's report is, like hammered,
because the Auditor-General is infallible," he said, sarcastically.
"The Auditor-General is not infallible, she's human and she can and
should be in this process subject to someone else's point of view. And
that's what I'm giving, another point of view."

He said the common notion that came out of Ms. Fraser's report  that she
could not account for $100-million of the $250-million paid to
Liberal-friendly advertising agencies  is misleading. He said he can
account for the money.

The main role of Vickers and Benson in the sponsorship program was a TV
series, co-produced with Chinese state television, that promoted Canadian
life and society in conjunction with a pair of Team Canada trade missions.
Mr. Hayter calculated the air time would have cost in excess of $50-million
if bought at normal rates, but the actual cost to Ottawa was a little over
$9-million.

He acknowledged that Vickers and Benson has also done election campaign ads
for the federal Liberals since the days of Lester Pearson. But that doesn't
mean the company has an automatic inside track on government business, said
Mr. Hayter. "It's true that we have won government competitions for
major contracts - not because of cronyism, but because we can be counted on
to give Canadian taxpayers value for money."

He said the agency worked three years with a variety of private and
public-sector partners to put together the Chinese deal. "The belief
that all it takes is a donation to the Liberal party and a three-minute
call to the Prime Minister's Office is a myth."

Some committee members disagreed with his criticism of the Auditor-General's report.

He also talked about the shadow that has fallen over the advertising sector
in Canada because of Ms. Fraser's report. "Our industry has been
embarrassed [by] this," Mr. Hayter said.


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