COVER

The downfall of a minister

Robert Miller February 25 1985
COVER

The downfall of a minister

Robert Miller February 25 1985

The downfall of a minister

COVER

Robert Miller

On the morning of Tuesday, Feb. 12, his last day as Canada’s defence minister, Robert Coates appeared to be relaxed and self-assured—unruffled by a three-week-long crescendo of Ottawa gossip about his performance in a job he had coveted for years and had enjoyed to the hilt for five months. At 9:30 a.m. Coates cordially welcomed an old friend—Ottawa business consultant William Morrison—to his West Block office on Parliament Hill. At that meeting, Coates asked Morrison, 57, to join his staff as “senior adviser-operations.” Morrison subsequently told Maclean's that he accepted the appointment, after asking for and receiving an assurance that the gossip—much of which related to Coates’s Nov. 27-Dec. 9,1984, visit to West Germany, Turkey, Belgium and Britain—posed no serious threat to the minister’s position. Said Morrison: “I had heard the gossip—this town is a rumor mill—and I put it to him. I asked Coates if he was in trouble. He said, ‘Absolutely not. Categorically no.’ ” Rolling: Later that morning, having reached an agreement that Morrison would join the minister’s staff “as soon as possible,” the two men left Coates’s office and strolled to the Centre Block, where they shook hands and went their separate ways—Morrison to begin rearranging his private business affairs, Coates apparently to attend a meeting of the powerful cabinet committee on policies and priorities. At that time, the presses of the Ottawa Citizen were rolling, printing a front-page account of a late-night November visit by the defence minister to a bar featuring striptease dancers and pornographic movies near the Canadian Forces Base at Lahr, West Germany. Barely three hours later a shaken Coates rose in the House of Commons to announce that he had resigned from the cabinet.

Morrison, a veteran Progressive Conservative insider and a staunch supporter of Prime Minister Brian Mulroney’s 1983 campaign for the party leadership, said that he watched Coates’s 3 p.m. performance on television. A well-to-do widower, Morrison said he was “stunned” by the development—more dismayed for Coates than concerned about his own position. He added: “It was the craziest thing, the shortest job I

ever held. I was supposed to do all the documentation, the paperwork relating to my appointment later that afternoon. I never got there.”

Among the rumors Morrison said he put to Coates at their morning meeting was one concerning careless handling of North Atlantic Treaty Organization (NATO) documents at Lahr. “I asked Coates about it,” Morrison said, “and he told me the story was absolutely false. He said that no one in his right mind would take NATO documents to a mess dinner or anywhere else. He said that all documents at Lahr had been locked away by military personnel. I was completely reassured.” As for the minister’s resignation, Morrison said he believed

the reasons Coates cited in his Commons statement: his respect for Mulroney, his sense of honor and his determination to clear his name through legal action. Said Morrison: “I have known Bob Coates for 25 years. He has the same warts a lot of us do, but he is an honorable guy.”

Mystery: Still, Morrison’s account of Coates’s last morning in office served to deepen the already profound mystery surrounding Coates’s sudden decision to resign and Mulroney’s equally sudden decision to accept his departure—particularly when a Mulroney-ordered security investigation, conducted through the office of cabinet secretary Gordon Osbaldeston, had established to the Prime Minister’s complete satisfaction that Coates had neither breached nor endangered national security.

According to Morrison—he served in

1983 on a Mulroney-appointed committee assigned to do initial planning for the transition to Tory rule that eventually followed the Sept. 4, 1984, federal election—his meeting with Coates came at short notice. But whether the impetus for the meeting came from the defence ministry, elsewhere in government or merely from Morrison’s own willingness to consider a public-sector job remained unclear. Said Morrison: “The meeting was set up over the phone on Monday by Rick Logan [Coates’s chief of staff]. Mind you, I had received word—I will not say from whom—on the weekend that such a call might come. Anyway, it was my understanding that I was being brought in to replace Duncan Edmonds,

although my duties would be somewhat different from his.”

Edmonds, 48, a prosperous Ottawabased business consultant, had joined Coates’s staff on Oct. 1,1984, as a senior adviser primarily assigned to prepare a green paper on reshaping Canada’s armed forces. He resigned abruptly—and unhappily—on Jan. 17 and returned to his company, JDE Consulting Services Ltd. In an interview with Maclean’s last Friday, Edmonds was extremely cautious in his choice of words, but he left little doubt that his brief return to the public sector as a senior adviser to Coates had been frustrating. He said that his access to the minister had been extremely limited, and that after Coates returned from his trip to Europe on Dec. 9, “I barely saw him. I would very much have welcomed the opportunity to have had some time with

Mr. Coates. But, whenever I asked Mr. Logan about the possibility, it didn’t seem to be convenient.”

Hopes: Edmonds said he began his defence job with high hopes. “Last September, two or three days after the new cabinet was sworn in, Mr. Coates invited me to lunch at the Four Seasons Hotel in Ottawa. Mr. Logan joined us.” During the lunch, Edmonds was hired. Edmonds had served in 1977-78 as a senior policy adviser to then-opposition leader Joe Clark, but his lengthy, if intermittent, experience in the public sector was primarily gained under Liberal governments led by the late Lester B. Pearson. During the 1960s Edmonds held a variety of appointments, including that of

executive assistant to former external affairs minister Paul Martin and that of founding director of the Company of Young Canadians. He is also a former assistant professor of political science at Ottawa’s Carleton University.

Sold: During most of the 1970s he concentrated on expanding the consulting business of Public Affairs International Ltd., a company he controlled with Torrance Wylie, a former national director of the Liberal party (Edmonds sold his interest in the firm in 1977). Still, after the 1984 Mulroney landslide, Edmonds was interested in returning to the public sector. “We had a new government likely to be here for some time, and there was a call out for people to come forward and participate,” he said.

Shortly after he joined Coates’s staff last fall, Edmonds travelled to Europe with the new defence minister’s par-

ty—it included Logan, 43, as well as senior military personnel headed by Lt.Gen. Gerard Theriault, chief of the Canadian defence staff. The party left Ottawa on Oct. 8 aboard a government-owned Boeing 707 and flew to Milan, before travelling by helicopter to the Italian resort town of Stresa for an Oct. 10-12 meeting of NATO’s nuclear planning group.

Rumors: From Italy, Coates and his party flew to London on Oct. 13 for talks with British military officials before returning to Ottawa on Oct. 16. The October trip, like the four-nation tour later in the year, gave rise to numerous rumors in Ottawa of high living among some members of the Canadian delegation. But none of the gossip could be confirmed. Edmonds refused to discuss the October trip, except in terms of its official business.

Asked to assess Coates’s behavior on that trip more specifically, Edmonds replied, “I do not want to comment publicly on Mr. Coates’s behavior on that trip.”

In early November Coates asked Edmonds to accompany a blue-ribbon delegation of 10 Canadian corporate executives representing the Business Council on National Issues (BCNI) on a visit to Germany, Belgium and Britain. The BCNI group had just produced what Edmonds described as “a first-class report on Canadian defence policy”—the subject he was researching for the ministry’s nowdelayed green paper—and Edmonds said that he found the BCNI tour to have been “a very enjoyable, very helpful trip.” Added Edmonds: “When I got back, Mr. Coates was getting ready to go on his trip. We [Coates, Logan and Edmonds] left the question of my going along sort of up in the air. I made no particular effort to go. I was not particularly enthusiastic about the Turkish part of the itinerary because of the situation within NATO in the eastern Mediterranean [both Turkey and Greece are NATO members, although their bilateral relations are strained]. In the end, I went to my vacation home in Boca Raton, Fla., and played golf for a week.”

The trip that eventually led to Coates’s resignation was something less than a tour de force in support of Canada’s image abroad—if only because of

Coates’s visit to the Lahr nightclub known as Tiffany. But Maclean’s has established that it was considerably more than the “tour de farce” depicted by Ottawa gossipmongers. The trip began at Ottawa airport on the damp, overcast evening of Nov. 27. Coates and his party travelled aboard a white Canadian Armed Forces twin-engined Challenger jet. An official log records that the Challenger was scheduled to take off at 6 p.m. for a two-hour flight to Goose Bay, Labrador, where it took on fuel and the party spent the night.

According to the official manifest, there were seven passengers: Coates, Logan, press secretary Geoff Matthews, assistant deputy defence minister (policy) John Anderson, policy adviser Paul Dunn, Lt.-Col. George Akamoto, Coates’s staff officer, and warrant officer

Michel Morency. The armed forces have two Challenger jets, both equipped with galleys to serve prepacked airline meals, as well as coffee, tea, soft drinks and alcoholic beverages. One of the passengers, who refused to be quoted by name, said he did not remember “anyone having a drink of liquor. The minister drank tea—he likes tea.”

Stunning: The Challenger took off from Goose Bay at 10:30 a.m., Nov. 28, and flew without incident to Lahr, a town of 48,000 in the Black Forest area of Bavaria. There are roughly 14,000 Canadian servicemen stationed at the Lahr NATO base. Coates and his party landed at 7 p.m. local time, and were met by Maj.-Gen. David Wightman, commander of Canadian forces in Europe. Coates was assigned a VIP suite in the Black Forest Officers Mess, a stunning

facility inherited by the Canadians from the French when they withdrew from NATO. After brief introductions, the minister and his party, together with senior officers and their wives, were entertained at an informal dinner hosted by Wightman.

Private: Lt.-Col. Leonard Dent, senior information officer with the Canadian forces in Europe, told Maclean’s: “The dinner went on until midnight, at which point the minister left and ostensibly went to his suite. The next morning, I understand, the commander [Wightman] picked him up and put him on the airplane. What happened in the private time of the minister is not for me to comment on. I don’t know what he did. The last the commander saw of him, he was heading upstairs.”

Coates did not stay upstairs, a deci-

sion which led to what Mulroney described 10 weeks later as “an error in judgment.” Shortly after Coates retired from the dinner, he, together with Logan and Matthews, left the base in Wightman’s car, apparently in search of a nightcap. They found it at the nearby Tiffany, a modestly decorated nightclub where three strippers compete with hardcore pornographic films for the customers’ attention.

David North, Maclean’s European bureau chief, reported that the club occupies part of a long, cream-painted, single-story building in Lahr’s industrial estate area. The neighboring premises are an electrical appliance wholesale company and a small commercial printing plant. Inside, there is a long, wellstocked bar, backed by mirrors, bottles and nude pinups. There is a small trian-

upstairs or downstairs here. Any kind of sexual contact is strictly forbidden. We have no prostitutes here, absolutely none.” Indeed, Tiffany is typical of uncounted German nightclubs that cater to a mainly unescorted male clientele willing to pay steep prices for drinks and company. It is not off limits to Canadian troops, but most do not go back—mainly because of the price list. According to Shaudt, who shares a nearby chalet with a girlfriend named Sonja and a Yorkshire terrier named Kiki—both spend their evenings at the bar with Shaudt —Coates,

guiar stage, where the dancers disrobe. There are two seating areas—one austere and containing plastic-topped tables and straight-backed chairs, the other a more comfortable series of chesterfields where well-heeled patrons may sit with off-duty entertainers, who are invariably thirsty for expensive drinks.

Drinking: During his visit, in the early morning hours of Nov. 29, Coates spent roughly 90 minutes drinking with, and talking to, a long-legged pink-andbrown haired dancer with the stage name of Micki O’Neil, a 38-year-old German divorcee and mother of two teenage boys. O’Neil, who declined to divulge her real name, told North, “I am a bit too old for this business, but I am a little bit young in my heart.” She added: “I don’t remember what he said. I did not think he was anyone particularly important. He was very charming, very polite. They all were.”

O’Neil said goodbye to Coates and went backstage to put on the costume she takes off in her act: Fantasy in White, danced to a Julio Iglesias record. By the time O’Neil finished her performance, she said, the minister had left. “I went home,” she added. “I am always glad to see my bed after a night’s work.”

Tiffany’s owner is 25-year-old Lothar Schaudt, a six-foot businessman who has been in the nightclub business since he was 18. Said Schaudt: “There is no

Logan and Matthews left the establishment before its normal 3 a.m. weekday closing time. A little more than four hours later Coates’s Challenger took off from Lahr and flew to Ankara’s Esenboga Airport, landing in the Turkish capital at 11 a.m. local time.

From a diplomatic point of view, the Turkish leg of Coates’s tour was the most sensitive —because of Canada’s desire to maintain good relations with Greece, as well as Turkey. During

his three nights and two days in Ankara, Coates maintained a swift pace: hurrying from meeting to meeting with Turkish ministers and military officers. He and the rest of the Canadian delegation had barely set foot in Asia Minor on Nov. 29 before they were rushed to an official luncheon hosted by Canadian Ambassador Gilles Mathieu at his residence on Turan Emeksiz Street. The minister’s party was billeted at the plush, highrise Buyuk [Grand] Hotel, on Attaturk Blvd. in the centre of Ankara. The Buyuk, described by political counsellor Harry Stirling of the Canadian embassy as Ankara’s “only international-class hotel,” boasts a rooftop restaurant with the near-mandatory cabaret featuring belly dancers as well as a stunning view of the hills surrounding the city.

Coates had three principal missions in Turkey, g in addition to his normal ^ duties as a defence min5 ister visiting a NATO ally. = He was seeking to pro| mote the possible sale of I a Candu nuclear reactor s to the Turks; to help the

federally owned deHavilland Aircraft Co. of Canada Ltd. secure a $500-million sale of Buffalo-model military aircraft, possibly through an arrangement with a Turkish firm which would manufacture them under licence; and to complete the gift of 20 CF-104 Starfighter jets to the Turkish air force.

During the brief stay Coates met with Turkish Defence Minister Zeki Yavuzturk, Deputy Prime Minister Kaya Erdern and Gen. Necdet Urug. He held a noon-hour press conference at the Turkish General Staff Building, part of the military compound covering a city block and fronting on downtown Milli Mudafa (National Defence) Street. And he was guest of honor at a Turkish Officers’ Club luncheon hosted by Yavuzturk. Stirling said the Coates party had “very little free time.” But even if their itinerary had been wide open, there were few options for recreation. Despite its population of almost two million, Ankara’s Ulus nightclub district is small, even provincial.

Luxurious: The Challenger left Ankara for Brussels and the NATO ministers’ meeting at 7 a.m. on Dec. 2, arriving at Mels Airport in the Belgian capital at 11:15. a.m. local time. Coates stayed in a fifth-floor room of the luxurious Hyatt Regency Hotel, and once again was confronted with a heavy schedule of meetings and official social events. Security surrounding the semi-annual meeting of the NATO Defence Planning Council was even tighter than usual, chiefly because of renewed concern about urban terrorism across Europe. Coates’s official car was accompanied by a Belgian motorcycle escort on its seven-kilometre trips between his hotel and the huge NATO complex of low, white, prefabricated buildings in the suburb of Evere.

During the NATO sessions on Dec. 4-5 there was virtually no free time. On the night of Dec. 3 Coates was the dinner guest of Canadian Ambassador to NATO James Taylor at Taylor’s official residence. On the night of Dec. 4 he attended a formal dinner at Egmont Palace, a splendid downtown government mansion, as the guest of Belgian Defence Minister Freddy Vreven. He was entertained at lunch on Dec. 4 by NATO military commanders and on Dec. 5 by Lord Carrington, a former foreign secretary in Prime Minister Margaret Thatcher’s British government and currently NATO secretary-general.

In addition, Coates had a number of bilateral meetings, including an afternoon talk with U.S. Defense Secretary Caspar Weinberger on Dec. 4. The final NATO session did not end until 6 p.m. on Dec. 5, after which Coates gave a press conference in the small Lange Room at NATO headquarters. He read a statement

which, aides said, closely paralleled his words in the plenary sessions, assuring Canada’s NATO partners that although details remained to be worked out, the Mulroney government intended to expand its commitment to the alliance.

The following morning, Dec. 6, Coates’s aircraft took off for London’s Heathrow airport at 9 a.m., arriving at 9:55. He and his party stayed at the Sheraton Park Tower hotel, in the fashionable West London district of

Knightsbridge. In contrast to the demanding pace Coates maintained in Ankara and Brussels, the final British leg of his tour was almost leisurely. On Dec. 7 he visited British Aerospace., the country’s largest defence contractor, for a briefing. The following day he travelled to the headquarters of the British army air corps, in the village of Middle Wallop, 135 km west of London. There, he had lunch with senior officers and watched a helicopter display staged by British pilots. The following morning the Challenger departed Heathrow at 10

a.m., stopping at Keflavik, Iceland, to refuel, and landing in Ottawa at 6 p.m. EST—after 12 days of travel.

Holiday: According to Edmonds, after Coates returned to his Ottawa office the minister briefed his senior staff on the Turkish leg of the trip. Apart from that, Edmonds said, he had little contact with his boss—in part because Coates spent the Christmas holiday in Hawaii, where he was joined later by Logan and Matthews and where he made a speech to the Pacific Parliamentary Association. Said Edmonds: “In the two weeks after New Year’s I barely saw him.” Then, following what he described only as “one or two insignificant changes in the way the office was run,” Edmonds made a decision. “I felt that perhaps I ought to offer my resignation, which I did on Jan. 17. There was no response that day. But the next day, at 10 a.m., I received a copy of a memo from Mr. Logan to the department saying, in effect, that my contract was terminated as of that day and that I should have one month’s pay. I cleaned out my desk, completed the paperwork and left the office at noon.” Edmonds said he received a cordial letter, handdelivered to his home, from Coates on Monday, Jan. 2, in which the minister wished him well on his return to the private sector.

Action: Edmonds refused to say whether he had complained or discussed his brief return to government service with senior officials. But he told Maclean's, “After my resignation I took what I considered professionally to be the appropriate action.” He declined to elaborate, other than to add, “I have acted honorably and correctly throughout.”

For his part, cabinet secretary Osbaldeston began an investigation into the Coates affair, bringing it to the attention of Mulroney on Jan. 22, according to William Fox, the Prime Minister’s secretary. The investigation continued in its various forms until Feb. 12. That was the day Coates hired Morrison, the day the Ottawa Citizen published its report on Coates’s night out at Tiffany in Lahr, and the day Coates resigned the job he had wanted for so long. For Coates, Feb. 12 ended sadly—back in his office, among a handful of well-wishers, including several fellow Tories from Nova Scotia and such longtime caucus colleagues as veterans affairs minister George Hees. A staff member ordered three buckets of Kentucky Fried Chicken in case anyone was hungry, and one or two callers accepted a glass of wine. But most did not tarry.

David North

Peter Lewis

Ian Mather

Brent King

Roy MacGregor

Hilary Mackenzie

Michael Rose

Terry Hargreaves