of the programme’s objectives or the results it achieved and was misinformed as to how the programme was being managed’.4 The first indications of misuse of funds emerged in 2000 with anecdotal reports of high and poorly documented expenditures. In 2002, spurred by additional revelations, the auditor general conducted a narrower audit of contracts within the sponsorship programme and declared that ‘senior public servants broke just about every rule in the book’ in awarding C $1.6 million in contracts to Montréal’s advertising agency, Groupaction Marketing – a key player, as it turned out, in the wider scandal. 5 By late 2003, with Fraser’s investigation yielding ever-more-alarming details, the government recognised the magnitude of the situation; on Martin’s first day as prime minister he terminated the programme and its administering agency, Communications Canada. Fraser’s report was thunderous in its denunciation: ‘The pattern we saw of noncompliance with the rules was not the result of isolated errors. It was consistent and pervasive. This was how the government ran the programme.’ 6 Furthermore, the payments ‘appear designed to provide commissions to communications agencies, while hiding the source of funds and the true nature of the transactions’.7 The government’s response to the report was swift and, in addition to attempts at damage control and blame avoidance, contained a number of parallel investigations and the institutional reforms noted above. Alfonso Gagliano, who as minister of public works had overseen the programme, was recalled from a diplomatic posting to face inquiries into his role and that of his department. A special counsel for recovery was appointed, with a mandate to pursue reclamation of improperly received funds. Most visibly, the parliament’s public accounts committee began immediate hearings into the matter. In his testimony to the parliamentary committee, Gagliano claimed ignorance of the misappropriations and argued that, despite
the principle of ministerial responsibility, he could not be held accountable for the actions of his department because he did not have hiring and firing authority over the agency involved. He instead blamed Communications Canada’s administrator Charles Guité. Others involved, however, described weekly meetings supervised by Gagliano and generally contradicted his testimony. Guité also claimed innocence, pointing the finger of blame at his superiors, especially Gagliano. Daily developments, charges and counter charges, firings and suits for wrongful dismissal or loss of reputation continued from February to May 2004.8 With the calling of a federal election in May, the investigation was suspended by the dissolution of parliament. The inquiry was replaced by campaign rhetoric as opposition parties took advantage of the scandal to attack the Liberal Party. The police are pursuing a number of criminal investigations at the time of writing, however, and an independent judicial inquiry was scheduled to begin in September 2004. Overall responsibility for the affair remains in dispute and the auditor general pointedly warned that the incidents uncovered so far might only be the tip of the iceberg: her office’s resources only allow direct audit oversight of a fraction of government spending, chosen on the basis of risk. The question is whether the sponsorship abuses are the product of an exceptionally overheated, undermanaged (and overfunded) but isolated programme, or whether they represent a more widespread erosion of responsibility in the government and public corporations. Ultimately, detailed rules and regulations exist that should have been applied to the activities of Communications Canada, and if applied, would have prevented the abuses from going so far. The problem appears to be that lack of accountability allowed administrators to exploit enthusiasm for the implicit antiseparatist goals of the programme and engage in practices that invited corruption by abrogating ‘two fundamental principles
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