Canada

THE ISSUE THAT HAUNTS THE TORIES

IAN URQUHART/ROBERT LEWIS February 23 1976
Canada

THE ISSUE THAT HAUNTS THE TORIES

IAN URQUHART/ROBERT LEWIS February 23 1976

THE ISSUE THAT HAUNTS THE TORIES

Canada

IAN URQUHART/ROBERT LEWIS

As the Conservative leadership campaign lurched toward its conclusion, one issue overshadowed all the others in the rush for control of the venerable party: Claude Wagner’s $300,000 trust fund. The issue ignited a bitter row between Wagner and his chief rival for the leadership, Montreal lawyer Brian Mulroney. who helped recruit Wagner to the Tories in the first place. The problem was not the fund itself, set up to supplement Wagner’s income after he left the security of a judicial appointment in Quebec'to reenter politics as a Conservative. After all, as Wagner himself frequently pointed out during the leadership campaign, similar funds were set up for former Liberal prime ministers Louis St. Laurent and Lester Pearson when they entered the political arena. The problem was the suggestion, chiefly from supporters of Mulroney, that Wagner had not been tel 1ingthe truth about the fund. Like the aftermath of Watergate, the whiff of cover-up pervaded the Civic Centre in Ottawa as delegates gathered for the convention.

The controversy, simmering since the Globe and Mail reported the existence of the fund last November, erupted just 10 days before the convention with the publication of allegations by Peter White, Wagner’s former executive assistant and now a Mulroney supporter. White, in what he termed a “reluctant” interview with Toronto Star reporter Robert McKenzie, said that a large sum of cash was delivered in a briefcase to Wagner’s wife, Gisèle. White said the money came from the office of Eddie Goodman, a Toronto lawyer. Tory

bagman, and trustee of the Wagner fund, just four days before the October 30, 1972, general election in which Wagner ran successfully as a Conservative candidate. White’s statement contradicted earlier assertions by Wagner that the fund was not even set up until after the 1972 election and, if true, meant that Wagner’s Tory commitment was not entirely altruistic. Gisèle Wagner denied White’s statement (“He’s a liar,” she said). So did Goodman (“That is the largest lie”). But White said he had “personal knowledge” the cash delivery was made. He would not elaborate. Wagner noted wryly: “It’s strange someone has been stirring things up just 10 days before the convention opens and after the polls showed I was a favorite.” (A poll taken in early February for the Toronto Star by Peter Regenstreif showed Wagner in the lead with Mulroney. a complete unknown just a few months before, a close second.)

In an effort to repair the damage wrought by White’s statement. Wagner’s supporters sought support for their man from the people they believe know the full story of the trust fund: Goodman himself, outgoing party leader Robert Stanfield and Finlay MacDonald, formerly Stanfield’s chief aide and national campaign chairman in 1972. Goodman, pleading solicitor-client relationship, refused to discuss the fund. “I’m not going to tell you anything,” he said. MacDonald, now living in Florida, also refused to comment, although he acknowledged he knows about the Wagner fund. Turning to Stanfield as a last resort, half-a-dozen MPS who are backing Wagner visited the Tory leader in his ^office a week before the convention to urge him to make a statement clearing Wagner’s name. Stanfield said he would think about it. Two days later he decided against making any formal statement on the matter lest it appear he was interfering in the campaign. Furious Wagner supporters perceived a concerted effort to leave their man hanging out on a limb while everyone else ran for cover. Said one MP backing Wagner: “Stanfield knows about the fund; As the leader of the party, he would have to know about it. He’s just trying to protect his own hide.”

In an interview with Maclean ’s Stanfield said he knew nothing about the fund. “I never discussed it,” he said. Did he discuss

the principle of the fund, if not the details? “No, no, no. I wasn’t consulted about the principle of the fund, although I must say and want to say that the people working around me would be well aware that I regarded it as important that we have Mr. Wagner as a candidate in that election. They wouldn’t feel it necessary to consult me about the establishment of such a fund.”

If Stanfield does not know anything about the fund, say Wagner’s supporters, Mulroney does and could clear up the situation by making a statement himself. Mulroney says this is not so. But Hugh Segal, a former Stanfield aide now working in Ontario premier William Davis’ office and a Wagner supporter, notes that Mulroney was one of the party fund-raisers in Quebec in 1972 and adds: “There’s very little of a financial nature that ever happened in the party in Quebec that Brian did not have a role in.” Mulroney. in seclusion in the

Eastern Townships just before the convention, was not available to respond.

What is known is that Mulroney, as Stanfield’s chief operative in Quebec prior to the 1972 election, played a major role in persuading Wagner to join the party. It was Mulroney who arranged a meeting at his then bachelor apartment between Wagner, a sessions court judge, and Stanfield in September, 1971. Negotiations continued for about a year before Wagner joined the Tories. Mulroney was aware that Wagner was concerned about financial “security” if he resigned his position on the bench. But Mulroney has insisted he simply communicated this desire to Stanfield’s office and took no further part in the establishment of any form of “security.”

In a last-minute attempt to contradict Mulroney and implicate him in the fund. Wagner’s supporters spread the rumor that Mulroney himself delivered to Goodman the $300,000 cheque that formed the base of the fund. If so, Mulroney would know whether or not the fund was set up before the 1972 election. But Goodman denies the money was delivered by Mulroney. He will not say who did deliver it or where the money was raised.

Other leadership candidates watching the mud-slinging from the sidelines urged those who knew about the fund to make a full statement to clear the air and enable the party to get on to other matters. “It’s doing damage to the party,” said Flora MacDonald. In response, Mulroney promised to launch an investigation—after being elected leader. And Wagner promised “to take all necessary steps” to clear the matter up—after the convention. Supporters of some of the other candidates hoped Wagner and Mulroney would pull

each other down in their bitter personal struggle and leave the field wide open for a third candidate, perhaps MacDonald, Paul Hellyer, Joe Clark, or Sinclair Stevens. Said one hopeful Stevens supporter before the convention: “I think Wagner knows he’s lost now and he’ll try to do a kamikaze job on Mulroney.”

But some anti-Mulroney MPS were not so certain that the young Montreal lawyer, whom they regard as an outsider because he has never held elected office, would be pulled down by Wagner. They decided to take measures of their own to stop Mulroney, organizing a petition stating that the MPS “firmly believe that only a person who has had experience in the House of Commons should be selected as leader.” About 30 MPS signed the petition before it was stopped at an angry meeting. It was not blocked by Mulroney’s supporters in the caucus (one week before the convention, he had just one MP openly backing him: Jim McGrath of Newfoundland) but by supporters of other candidates who viewed the petition as bad tactics. “It would have made it look as if the establishment was against Mulroney and that could only help him,” said one MP. That didn’t stop former prime minister John Diefenbaker from entering the fray, however. “I’m not going to talk about individuals,” he told reporters. “I’ll just say that never in British or Canadian history has there been a case of anyone unknown to parliament or a legislature being able to lead a party.” He left no doubt his target was Mulroney.

The reason for Diefenbaker’s antipathy toward Mulroney was not only lack of experience, said people close to Diefenbaker, but also the allegation that Dalton Camp, the old Diefenbaker foe, was backing him and that Mulroney was waging an expensive campaign financed primarily by Power Corp., the huge Montreal conglomerate. The support of Camp for Mulroney was vehemently denied by both parties, but questions about the financing of Mulroney’s campaign were handled less convincingly. David Angus. Mulroney’s treasurer, was reluctant to answer questions earlier in the campaign. Finally, on the eve of the convention, Angus said he hoped to raise $150,000 to $200,000, including a contribution of $ 10,000 from Power Corp., one of Mulroney’s clients in Montreal. That would put the Mulroney campaign on the same scale as Hellyer’s, Clark’s and Stevens’ (all three said earlier in the campaign they expected to spend up to $175,000). But Mulroney’s opponents don’t believe the figures and say he will spend $500,000 or more. Mulroney is not required to give a full accounting until after the convention.

In contrast to the secrecy of Mulroney's campaign finances and the mystery about Wagner’s fund. Flora MacDonald called a press conference the week before the convention to reveal her budget and the names of all donors who gave more than $100. “Secrecy in party finances,” she declared,

“is one of the greatest causes of apathy, cynicism and distrust about politics in this country.” MacDonald disclosed her projected spending for the entire campaign is $127,838.90 with $25,000 of that targeted for the four-day convention in Ottawa. Among her backers were Goodman, who is also her chief fund raiser, and several of his friends, clients and associates. But the bulk of the donations came in small amounts from supporters across the country, including one in a letter addressed simply. “Flora, Ottawa.”

Whatever the outcome of the vote, the Tories had already made a stunning retreat from the days of Sir John A. Macdonald: the party executive, at the urging of the candidates, banned free booze in favor of cash bars at convention hospitality suites.

IAN URQUHART/ROBERT LEWIS