Grit donors given $158M in contract

Three Montreal firms in controversial program donated $246,000 to Liberals

Jack Aubry
Ottawa Citizen 18 mars 2002

OTTAWA - The three top-billing agencies in the Chretien government's controversial sponsorship program -- who have been awarded contracts of almost $158-million -- have donated $246,000 to the Liberal party, it was revealed yesterday.

The donations amount to more than 80% of the money given to the Liberals by the nine agencies competing for the sponsorship program. The program has been mired in allegations of patronage and has been called a "slush fund" by opposition members.

Yesterday, Canadian Alliance MP Peter Goldring said the firms were being paid handsomely for putting together lists of clients and providing them with federal sponsorship money.

"Then it is only fair to return a commission to the Liberal party. At least, that's the optics of the thing," said Mr. Goldring.

Documents obtained through the Access to Information Act reveal the three Montreal agencies were the top financial backers for the Liberal party on the list of nine agencies competing for sponsorship contracts.

Between 1997 and 2002, Groupaction Marketing Inc. was awarded $61.7-million worth of contracts.

The agency, which has several senior members who worked for Liberal ministers during federal elections, has donated $112,162 to the Liberals since the Chretien government took power in 1993.

Groupe Everest -- which was awarded contracts of $55.7-million in five years -- has donated $77,033 since 1993.

Lafleur Communications Marketing has been awarded contracts of $40.4-million in the last five years.

It has donated $56,834 to the government.

The nine agencies selected by the government for the sponsorship program donated more than $300,000 to the Liberal party since 1993.

The marketing agencies act as the middlemen between the government and events seeking sponsors and receive commissions equalling 12% of each contract.

A scathing internal audit on the program in 2000 revealed examples of incomplete or missing files, improper billing and contracts being signed after the events took place.

Opposition members have attacked the sponsorship in part because of its connection with former Public Works minister Alfonso Gagliano, the Chretien government's former Quebec political lieutenant.

The program was in the news last week after a report, contracted for $550,000 from Groupaction in 1999, went missing, with both the agency and government saying they no longer had a copy. On Friday, the firm produced a draft of the report.

Documents obtained by researcher Ken Rubin also confirm the federal government broke its contract policy rules by awarding more than 25% of the sponsorship work to each of Groupaction and Groupe Everest in 1999-2000.

Anything higher than 25% is considered "market dominance" by Treasury Board under its contract guidelines.

Groupaction has landed considerably more than 25% of the $240-million worth of contracts given out in the past five years -- especially if it is taken into account that it has bought up Lafleur and Gosselin Relations Publiques in the past few years.

An examination of the contract list for 2000-2001 identifies Groupaction as the firm with 36% of the contracts, with Groupe Everest awarded 27%.

Diane Viau, a spokeswoman for Communications Canada, acknowledged the high ratios but stated that no firm received more than 25% in 2001-2002, following the audit.

Groupaction received about 21% of the $40,458,235 worth of contacts while Groupe Everest landed about 24% during the current fiscal year. Lafleur and Gosselin were awarded $5.4-million and $5.7-million worth of sponsorship contracts, respectively, in 2001-2002, while Groupaction was awarded $8.6-million.

When totaled, the $19.7-million worth of contracts represents almost half of the $40-million worth of sponsorship work in the program this year.

The federal government uses its sponsorship program to fund cultural, sporting and municipal events, held mostly in Quebec, in return for advertisements of its role promoting the event.

Ms. Viau said the program received more requests for federal sponsorship from Quebec, sometimes to match the separatist government's participation, than all the other provinces combined.

With seven out of nine of the program's agencies competing for contracts being from Quebec, the province claimed 78% of the $40.4-million worth of contracts this year. This represented an increase from Quebec's 70% share in the 2000-2001 program.

Since 1998-99, when the region started to be identified on the contract, Quebec has claimed 69.6% of the $187-million spent on sponsoring events.

Mr. Goldring called Quebec's dominance in the program unfair and found it "unbelievable" that other provincial events were not as needy for federal sponsorships.