CANADA

New trials for Mulroney

MICHAEL ROSE February 15 1988
CANADA

New trials for Mulroney

MICHAEL ROSE February 15 1988

New trials for Mulroney

CANADA

It was just the kind of reception that Brian Mulroney needed. Facing a political storm in Ottawa over his decision last week to fire Michel Côté as minister of supply and services, the Prime Minister flew to Saint John, N.B., on Feb. 4 to visit a shipyard that had just received $2.7 billion in federal contracts to build frigates for the navy. While reporters dogged his steps, asking questions about the Côté affair, Mulroney found the shipyard workers unperturbed by his latest political troubles. They whistled and cheered when he donned Saint John Shipbuilding coveralls. Said steelplater Christopher Morrison: “He gave us some work here, he put work in for the boys. Yes, I would vote for him. The scandals don’t bother me too much.”

In Ottawa, however, Mulroney and his Conservative government were not so fortunate. Opposition critics kept up a relentless attack over Côté’s Feb. 2 firing, which followed the discovery that he had violated federal conflict-ofinterest guidelines by failing to declare a $250,000 personal loan from a Quebec City friend who is a contractor. For Mulroney, the timing could not have been worse. The Côté affair and Mulroney’s troubles erupted just as his government appeared to be regaining some of the popular support it had lost during its rocky 40 months in power. The frustration showed in Mulroney’s

face as he met reporters before a Conservative caucus meeting on the morning after the firing. Declared Mulroney angrily: “I’ve read the riot act time and time again to my caucus and to my ministry. To indicate that I’m displeased or disappointed today is the understatement of the year.”

Côté’s departure brought to eight the number of ministers forced to leave the Tory cabinet under a cloud since the government took office in September, 1984. To make matters worse, there were other revelations last week about a second controversy facing the government, that one involving 1984 electionspending irregularities by Energy Minister Marcel Masse. The two crises hit the government in its weakest spot: credibility and trust among voters. Sensing that, the opposition parties in the House of Commons maintained a barrage of questions over the government’s ethical standards, at a time when speculation is widespread that Mulroney will call an election this year.

Like many of the ministerial resignations that preceded it, Côté’s departure came with little warning. On the morning of Feb. 2, senior officials in the Prime Minister’s Office became aware of a possible breach of the conflict-ofinterest guidelines by Côté. Toronto’s Globe and Mail said later that one of its reporters had been investigating Côté’s financial affairs at the time. The

Prime Minister’s principal secretary, Bernard Roy, and his chief of staff, Derek Burney, informed Mulroney of the potential problem at 1 p.m. Mulroney ordered them to investigate, and by early evening, with confirmation of an infraction in hand, Mulroney telephoned Côté from 24 Sussex Drive and, in the words of press spokesman Marc Lortie, “demanded” that Côté resign. Shortly before 9:30 p.m. the PMO issued a terse three-paragraph state-

ment. Information was brought to the Prime Minister’s attention, it said, that indicated Côté may have violated the conflict-of-interest guidelines by “neglecting to report a personal loan.” Said

Lortie after the minister had resigned: “I think it’s permanent.”

Meanwhile, Côté went to the Langevin Block, the sandstone building facing Parliament Hill that houses the PMO, to discuss with Roy the Commons statement he would make the next day. Côté left the building at about 10 p.m., had a late dinner with tearful aides at a local restaurant and drove off in his chauffeured limousine at 11:30 p.m. He refused to answer questions, but the next

day he read a brief statement to a hushed Commons. Said Côté: “The demands of political life in recent years, both on my family and myself, made it necessary for me to call upon a longtime

friend, who has granted me a personal loan.”

However, Côté insisted that “this situation has never placed me either directly or indirectly in a conflict of interest in regard to the ministerial responsibilities that I have assumed.” Mulroney, who listened with head bowed as Côté spoke, shook his hand before the former minister left the House to burst through a thicket of journalists’ microphones and cameras.

A burly colleague and friend, Guy StJulien, MP for Quebec’s Abitibi riding, shoved reporters aside and blocked the exit door while Côté climbed into his car. A friend who had spoken to Côté

earlier in the day said that the 45-yearold former accountant appeared stunned by the turn of events. “He said, ‘It’s over and that’s that,’ ” the friend said. “I have a feeling he hadn’t realized the impact of it all.”

In the Commons, the opposition was quick to point out that Côté had left some critical questions unanswered, among them, Who provided the loan and how big was it? Côté’s lapse clearly angered the Prime Minister’s advisers. After Côté’s abrupt firing, the advisers had expected Côté to make the details public in order to quickly end the affair. Instead, it was left to Deputy Prime Minister Don Mazankowski to confirm the details—after many of them had been made public in the media. Under intense questioning from the opposition, Mazankowski confirmed reports that the “friend” who had lent the money to Côté was René Laberge, a Quebec City building contractor and Conservative party supporter. The loan, Mazankowski said, was “in the order of $250,000,” borrowed in instalments over a period of two years. Mazankowski said that he did not know the interest rate. Laberge owns Adélard Laberge ltée, a prosperous commercial contracting firm, and is a shareholder in Les Terrasses du VieuxPort, a $15-million condominium project built on federal land in Quebec City’s rejuvenated port area.

Mazankowski said that senior officials were making an exhaustive check of any federal contracts with Laberge’s companies for any evidence of conflict of interest. But those who knew Laberge said that they did not think he would seek to gain favors from Côté by lending him money. A member of Côté’s staff said that the two men, friends for 20 years, were “very, very close,” and described Laberge, who is in his 60s, as the 45-year-old Côté’s “guardian angel.” Côté has rented a condominium in Laberge’s Quebec City complex for $1,200 a month.

For Mulroney, the conflict-of-interest rules have become a minefield. In September, 1985, Mulroney tightened up

the guidelines revised in 1980 by the Liberal government of Pierre Trudeau. Mulroney boasted then that the new code was the toughest adopted by any Canadian government. But last week Mulroney claimed that Trudeau had saddled him with an impossible state of affairs. “The situation that I inherited from Trudeau is worthless,” he told reporters in Ottawa. Mulroney’s evident frustration was deepened by the fact that he had insisted after the 1986 resignation from his cabinet of Sinclair Stevens, who was subsequently found by an inquiry to have violated conflictof-interest guidelines on 14 occasions, that all ministers fill out an exhaustive, 19-page questionnaire to ensure that they were in compliance with his conflict code. On Wednesday Mulroney told the Commons that Côté had filled out such a document. Later Mazankowski said that Côté had said nothing about the Laberge loan in the questionnaire. “We wanted a clean bill of health from all cabinet ministers,” said Mazankowski, “and we thought we had one.”

While opposition members demanded more answers about the Côté firing, their attention turned at week’s end to the conduct of the Prime Minister himself. They suggested that Mulroney had broken his own conflict-of-interest rules by not declaring approximately $158,000 that he had obtained from his party to redecorate his official residences. Mulroney refused to answer questions on the matter, but Mazankowski told the Commons that the money was not a loan but an “advance” that did not have to be reported. Jean-Pierre Kingsley, the associate deputy registrar-general, who administers the government’s conflict-of-interest guidelines, said that the rules require the reporting of liabilities and added, “A liability is if you get money from somebody and you have to pay it back.”

The opposition was equally determined to win political points over the Masse affair. Masse’s troubles appeared to be over when no charges emerged from a 1985 investigation by elections officials into the minister’s 1984 election spending. But on Jan. 25 Montreal’s Le Devoir newspaper published a confidential letter to Masse from then-elections commissioner Joseph Gorman. In the letter, dated Nov. 28, 1985, Gorman told Masse that the minister had “participated” in an infraction of the Elections Act but that

“it would not be in the public interest” to lay charges.

Last week Toronto’s Globe and Mail reported that an RCMP court affidavit filed on Nov. 15, 1985, revealed that Masse had personally asked his former employer, Lavalin Inc. of Montreal, to pay $780 of his election expenses. Then the Montreal Gazette cited other 1985 RCMP affidavits and sources close to the Masse investigation as indicating that he had overspent the legal campaign limit by about $20,000. Those reports were published in advance of Masse’s scheduled appearance this week before a parliamentary committee investigating alleged election expense violations.

The allegations against Masse generated a furious debate in the Commons.

Opposition MPs succeeded in getting Gorman, who served as elections commissioner for 11 years until he retired at the end of 1987, to appear before the committee to explain why he had not laid charges. Gorman confirmed that Masse “had made requests of third parties to pay certain expenses,” but he insisted that it was not a violation of the Elections Act.

Still, Gorman acknowledged, it was a violation of the section of the Criminal Code that makes it illegal to encourage third parties to commit offences. However, Gorman astonished committee members by testifying that he had decided that charges were not required because Masse’s 1984 win in the Frontenac riding was so large—a majority of 19,092 votes—and the amount of money involved so small. Said Gorman: “I am reluctant to use the Criminal Code when the offence is not grave.” That statement angered even Conservative members of the all-party committee. Declared Toronto MP John Bosley, a former House Speaker: “That’s appalling. How can anybody have any confidence in a system that does that?”

There was yet another disturbing reminder last week of the government’s problems with ethical matters when the trial of former junior transport minister André Bissonnette got under way in St-Jean, Que. Crown prosecutor Hélène Paré told the jury that Bissonnette, his co-accused, Normand Ouellette, and their wives had made a profit of $913,000 on a series of land flips. The two men are charged with defrauding Oerlikon Aerospace Inc., a Swiss-based arms manufacturer that is building a plant in Bissonnette’s St-Jean riding, southeast of Montreal, to fulfil a federal defence contract. Because of the land flips, the cost of the site chosen by Oerlikon for its plant rose to nearly $3 million from $800,000 in an 11-day period in 1985. Bissonnette joined the ranks of disgraced Tory ministers one year ago, when Mulroney fired him after his involvement with Oerlikon became public.

Tory strategists were clearly concerned last week about the damage that such incidents will do to the government’s re-election hopes, coming at a time when opinion polls only recently £ showed a slight rise in g Tory popularity. In Halix fax at week’s end, Mulroney told 1,600 Nova Scotia Tories that the Côté furore would hasten introduction of a long-delayed “ethics package” for ministers that would replace the existing conflict-ofinterest guidelines. As well, Conservative insiders indicated that the government planned to introduce reforms to the Canada Elections Act in order to avoid a repeat of the Masse controversy.

Senior Tories said that they had hoped to capitalize on the party’s improved showing in the polls by continuing Mulroney’s heavy schedule of travel to smaller communities in the country. Mulroney’s visit to the Saint John shipyards was part of a two-day tour of the Maritimes, which also included stops in Halifax, and Edmunston, N.B. But even Mulroney’s supporters say that he cannot escape his cabinet troubles. And they acknowledge that another incident like the Côté affair could be fatal. As Mulroney himself said in Saint John, shipyard workers with new contracts have “more job security than a Prime Minister gets.”

-MICHAEL ROSE with MARC CLARK in Ottawa, LISA VAN DÜSEN in Montreal and HILARY MACKENZIE in Saint John

MARC CLARK

LISA VAN DUSEN

HILARY MACKENZIE