Canada

Caught in the Rough

John Geddes,Julian Beltrame April 2 2001
Canada

Caught in the Rough

John Geddes,Julian Beltrame April 2 2001

Caught in the Rough

Canada

John Geddes

Julian Beltrame

How much trouble is Jean Chrétien in? The Grand-Mère Golf Club in Shawinigan, Que., has been, in political terms, nothing but rough for the Prime Minister for many months. But last week, Chrétien found himself in the longest grass yet in the prolonged saga— his critics would say scandal—of his financial entanglements in his home-town course. New allegations suggest that he was still registered as a part owner of the club after 1993, when he has repeatedly said he sold his shares once and for all. Whether in fact Chrétien had any stake in the business after that point is important. If he did, then his later lobbying for a federal loan for a hotel beside the course might be seen as a conflict of interest—because, what was good for the hotel would also enhance the value of the adjacent golf club. Even political foes who had not previously made much of the issue are now weighing in. “Mr. Chrétien is on the verge of destroying what he probably thinks is his legacy,” said NDP MP Biü Blaikie. “That is to say, restoring Canadians’ confidence in politics after the Mulroney years.”

The notion that Ottawa is spiralling downward to the level of suspicion and acrimony that soured the endgame of Brian Mulroney’s era sounded credible. Progressive Conservative Leader Joe Clark, who has doggedly pursued the GrandMère issue for weeks, accused Chrétien of “an ominous combination of conflict of interest and concealment of the truth.” Clark called for Chrétien to step down as Prime Minister while there is an independent public inquiry. Until the inquiry is completed, Clark said, Chrétien “is not in a position to func-

tion with the necessary authority as Prime Minister of Canada.” Canadian Alliance Leader Stockwell Day echoed the calls for an inquiry, but stopped short of demanding Chrétien step aside in the interim.

For his part, the Prime Minister was in his Shawinigan riding last Friday when the latest twists in the story prompted an uproar in the Commons, but Deputy Prime Minister Flerb Gray rebuffed the Opposition proposals for a judicial investigation. “There is no basis for an inquiry,” Gray said flatly. “The Prime Minister has stated the facts from his place in the House of Commons.”

There is no denying that Chrétien has responded to a lot of questions on business affairs in his riding. The problem is that new information keeps popping up. The development that sparked last week’s firestorm was reported in the National Post, which has largely kept this story alive. It quoted Melissa Marcotte, whose family owns 25 per cent of the golf club, as claiming that a holding company belonging to Chrétien continued to be listed on the golf-club company’s official shareholder registry after he says he got rid of the shares in November, 1993. But in a later interview with The Canadian Press, Marcotte admitted that she had not actually seen the company records. Still, Chrétiens position is that even if it turns out his company was listed on the registration documents after 1993, that doesn’t really matter. “The Prime Minister is obviously in no position to comment on how a company he had no interest in kept its records,” said Duncan Fulton, a spokesman for the Prime Minister’s Office.

It is the declaration that Chrétien had “no interest” that lies at the heart of the matter. But that defence depends on a nuanced understanding of a complex series of deals. Chrétien and two partners bought both the golf course and the adjoining Auberge Grand-Mère in 1988. It meant more to him than just an investment. Chrétien would later joke that when he was growing up, the club had catered to the local Anglo paper-mill managers, but the new proprietors made sure francophones got all the good tee-off times. But before the 1993 election, Chrétien sold his stake in the inn outright. Just after winning the vote, he made another deal to sell his golf-course shares to Toronto investor Jonas Prince. Then in 1996, Chrétien advised the federal ethics counsellor, Howard Wilson, that Prince had never paid him. The status of the shares at that point is murky, apparently because the terms of the deal were unusually informal. “When you sell a piece of property and you don’t get paid, usually it reverts back to you,” Wilson told Macleans. But in this case, he said, “it did not. This was a sort of written version of a handshake.” Chrétien could have sued Prince, but instead put his lawyer, Debbie Weinstein, to work trying to find a new buyer. Three

years later, Louis Michaud Investments Inc. bought the shares, with the payment flowing from Prince to Chrétien. While Chrétien declares that he never took back those shares in the golf course from 1993 to 1999, he makes no apology for wanting to be paid. “I had no interest whatsoever in either the golf course or the hotel,” Chrétien said in the House last week. “I did, however, want the money owing to me to be paid. That is completely normal.”

But Chrétiens normal desire to get what was owed him must be considered in light of his extraordinary position as Prime Minister. He used his influence in 1996 and 1997 to press the then-president of the federal Business Development Bank óf Canada to lend $615,000 to the owners of the Auberge Grand-Mère. While he had severed direct ties with the inn, the fact that he was at the time still seeking payment for his golf-course stake raises a tough question. Could he have been looking out for the inn’s well-being to make sure the golf course did not become less attractive to potential buyers for those shares Prince had failed to pay for? That is the incendiary accusation fired from the Opposition benches. “The Prime Minister appears to have used his office for his own financial benefit,” Day said in calling for an inquiry.

And then there is the related charge: that ChréI tien has dodged and evaded direct questions on the I matter for two years. His lobbying of the Business “ Development Bank, for instance, came to light in 1 media reports only last fall after Chrétien had re% peatedly batted away queries by insisting that the § bank had made its lending decisions independently. I But once news of his involvement was out, Chré! tien explained that he never meant to suggest that 1/1 asan MP he had not “made representations”—only that he had not interfered with the bank’s right to ultimately come to its own decisions. Some of his closest confidants say the suggestion that he was wrong to go to bat for businessmen in his riding cuts against everything Chrétien has ever believed about politics. “I first worked with the Prime Minister in 1967,” recalled one old adviser on condition of anonymity. “He said then, ‘These people elect me. If I don’t represent them, who will?’ ”

But the doctrine that MPs must be unfettered in their right to help out constituents now seems bound to come under closer scrutiny. Back in the 1993 election—when “governing with integrity” was a Liberal slogan—Chrétien promised to draft a new code of conduct for MPs and Senators. It was never delivered. He vowed to appoint an ethics counsellor who would report to Parliament. Instead, the counsellor is appointed by the prime minister—and answers only to him. Ethical rules for cabinet ministers, which the Prime Minister’s Office says exist, are kept secret. Chrétien may yet establish that his own actions were beyond reproach, but the fact that this affair has dragged on so long suggests that federal politics may be overdue for a new, clear set of rule books. E3