Canada

The auditor gets tough

Fraser asks the RCMP to get to the bottom line

JOHN GEDDES May 20 2002
Canada

The auditor gets tough

Fraser asks the RCMP to get to the bottom line

JOHN GEDDES May 20 2002

The auditor gets tough

Canada

Fraser asks the RCMP to get to the bottom line

BY JOHN GEDDES in Ottawa

Words like “appalling,” “disturbing” and “completely unacceptable” get tossed around often enough in Ottawa, usually on Parliament Hill where they tend to be discounted as tiresome partisan hyperbole. But when Sheila Fraser, the auditor general of Canada, used them last week in her indictment of the handling of three federal Public Works contracts worth $1.6 million that were awarded to Groupaction, a Liberal-connected Montreal communication agency, the adjectives sounded meaningful. There was something about Fraser’s level-headed manner—an understated style associated with grey-haired accountants, at least in the days before Enron—that commanded respect.

Still, Fraser couldn’t help letting a little gotcha creep into her voice when she explained why she was launching a follow-up, government-wide audit of federal advertising and sponsorship programs—worth about $40 million a year. “You cannot put three such badly managed contracts before the auditor and not think we’re going to go look at them all,” she said. Her broader review should be completed in late 2003. As for the Groupaction contracts already found so badly wanting, Fraser has turned the matter over to the RCMP for a possible investigation into wrongdoing that goes well beyond what she, as watchdog over the way taxpayers’ money gets spent, is allowed to probe. Criminal charges are a possibility.

Between Fraser and the RCMP, the Groupaction affair might turn into the one that forces Jean Chrétien to take real action to repair his government’s battered reputation on ethics. The details behind the contracts are murky at best. As Fraser put it, an “appalling lack of regard for rules and regulations” left little in the way of the normal paper trail on what the firm did for its $1.6 million. Groupaction was sup-

posed to write three reports from 1996 to 1999 advising Ottawa on how to raise its profile in Quebec. It never completed the work, but was paid anyway. Among many irregularities, the most glaring is that the second report—for which the government paid $549,990—is nowhere to be found, if it ever existed.

The government’s immediate response was to try to contain the scandal. Public Works Minister Don Boudria announced “corrective measures” to change the way his department handles sponsorships. Yet he also denied there was any reason to cast suspicion beyond the Groupaction deals. “You mustn’t generalize,” Boudria scolded when asked questions that assumed his department has a bigger problem. But, in fact, there was ample cause for concern about Public Works and Government Services Canada contracting long before the Groupaction fiasco. “In general, government managers believe that accountability for contracts issued by PWGSC is unclear and, accordingly, management oversight of these contracts is weak,” the auditor general said presciently in a report last year.

The question is how much that lax oversight encourages political meddling—or is the result of it. The man who might best answer that one is Boudria’s predecessor, Alfonso Gagliano, who was in charge

when Groupaction won two of the lucrative contracts. But Gagliano isn’t around to be grilled: he was named ambassador to Denmark by Chrétien early this year as persistent questions about whether he had abused his power at Public Works to help friends and Liberal supporters were threatening to become a serious embarrassment. Ian Greene, a York University political science professor who has written extensively on political ethics and was called in to advise the government on conflict-of-interest issues soon after the Liberals came to power in 1993, says using advertising, communications and polling contracts to reward political allies is an old Ottawa tradition. “There are rules to try to prevent it, but this sort of thing is quite ingrained,” Greene said.

Chrétien was in Europe last week and waved off most questions about Groupaction, although he accepted the need to refer the matter to the RCMP But this uproar may grow loud enough to force him to finally take steps to try to set a new tone on ethics. The Prime Minister has several chances to act soon. Rules to limit the wav cabinet ministers influence Crown corpi ■ rations, and guidelines for how they should behave when seeking their part) s leadership, are in the works. As well, an internal government task force is slated to report this month or next on access to information—a closely related issue since secrecy is a key ingredient in the growing unease over this government’s ethical standards. Real reforms in these areas would surprise critics who expect Chrétien to do little. Timid ones would fulfill expectations that he will merely try to ride out the storm. ED