Canada

The Sky Shops Five

IAN URQUHART May 3 1976
Canada

The Sky Shops Five

IAN URQUHART May 3 1976

The Sky Shops Five

OTTAWA

The charges had been expected for weeks, but Ottawa, somnolent in the annual Easter recess of parliament, was still startled when RCMP Inspector Rod Stamler went before Justice of the Peace Herb Wood at five-thirty on an April afternoon to formally accuse five prominent Canadians of conspiracy to defraud the government in the so-called “Sky Shops affair.” The timing of the charges had been a well-kept secret. Even the Quebec government, which had expected to prosecute the case in Montreal, hadn’t been told that the case had been taken out of its jurisdiction and didn’t find out that the charges had been laid in Ottawa until half an hour after the event. Much of the rest of the country learned of the developments later that evening when the CBC flashed a bulletin during an NHL play-off game saying that NHL President Clarence Campbell, Senator Louis Giguère, and “three other men” had been charged.

The three other men were Louis Lapointe, a Montreal contractor; James Lavery, a Toronto accountant, and Gordon Brown, a retired shipping executive now living in Freeport, Bahamas. All five accused were shareholders in Sky Shops, a duty-free shop at Montreal’s Dorval airport, before selling to P. Lawson Travel in 1972. The sale came after Giguère allegedly used his influence with the government to get Sky Shops’ lease at Dorval extended by the transport department.

Two days after charges were laid by the RCMP, the five accused surrendered themselves into custody, were arraigned in provincial court in Ottawa and remanded to June 21. The spectacle attracted about 25 reporters and more than a dozen curious hangers-on, including two members of the Conservative Party research office. The presiding judge was Robert Hutton, the same man who convicted Environment Minister 7ean Marchand for leaving the scene of an accident last year. He released the five accused on bail set at $100,000 each.

Initially public attention in the case centred on Campbell, 70, a former Rhodes scholar, war-crimes prosecutor at Nuremberg, and winner of the Centennial Medal in 1967 for service to Canada. He is the third major NHL figure to be accused of a criminal offense in recent years.* But the significance of the Sky Shops affair reaches into the federal government. Named a coconspirator by the RCMP, but not charged, was Carmel Carrière, now a member of the Immigration Appeal Board but executive assistant to Marchand at the time.* She will reportedly be a key Crown witness at the trial. Giguère is a Liberal bagman in Quebec who helped recruit Marchand as a candidate in the 1965 federal election.

* Harold Ballard, president of the Toronto Maple Leafs, went to prison in 1972for misappropriating $205,000 in Maple Leaf Gardens’ funds, and Tom Scallon, former president of the Vancouver Canucks, served eight months in jail on charges of stealing three million dollars from Northwest Sports Enterprises Ltd., owners of the Canucks.

Giguère was not talking after the charges were laid (“You’re wasting your time,” he told a reporter) and Carrière and Marchand were not available for comment. In an interview with Maclean’s before the charges were laid (see page 4), Marchand said “1 never received anything from Sky Shops, nothing at all. Did anybody in my office have anything to do with it? I don’t know. We will see.” Prime Minister Pierre Trudeau, however, has already expressed his confidence in the integrity of Marchand and Don Jamieson, who, as transport minister in 1972, was ultimately responsible for the Sky Shops lease at Dorval airport. Trudeau discussed the case with RCMP Commissioner Maurice Nadon one week before the charges were laid and emerged to tell reporters he was convinced the two ministers had done nothing wrong.

But Elmer MacKay, the Nova Scotia Conservative MP who first publicized the Sky Shops case last fall, said Trudeau must apply a higher standard to his ministers than to ordinary citizens. “I think Marchand and Jamieson should be judged by the Pearson code, not the Criminal Code,” he remarked in a reference to the code of conduct set down for cabinet ministers by former prime minister Lester Pearson. MacKay cited the following passage from the code: “There are several things that should be stressed. The central one is that a

* Carmel Carrière’s two-year appointment (at $27,000a-year) to the Immigration Appeal Board in Montreal expires May 10. When asked if she would continue to sit during the Sky Shops trial, the board’s registrar, Roger Hélie, replied: “She is a member of the board appointed by the cabinet and as such she is entitled to sit on the

minister’s staff must be subject to exactly the same high code of conduct that is recognized for ministers themselves.” As parliament prepared to resume sitting on April 26, MacKay’s call for a public inquiry had fallen on deaf ears.

The Sky Shops case, under investigation by the RCMP for more than a year, centres on the government lease held by the dutyfree shop at Dorval airport. It was due to expire in 1974, but the owners of Sky Shops wanted a five-year extension. Documentation already made public by MacKay shows that Sky Shops first used former cabinet minister Lionel Chevrier as a lobbyist to getan extension in 1970. Sky Shops also enlisted the aid of Marc Lalonde, now the health minister but at that time principal secretary to Trudeau. Despite this intervention, the lease was extended for only 10 months. Then, in 1971, Giguère, who was appointed to the Senate by Trudeau in 1968 after he had helped in the Prime Minister’s leadership campaign, allegedly approached Carrière. Carrière then allegedly wrote the office of Transport Minister Jamieson concerning the Sky Shops lease and, several months later, the ministry agreed to the extension of the lease until 1980.

In June, 1972, Giguère bought 5,000 shares in Sky Shops at one dollar a share, a bargain-basement price (Andy Anton, former president of Sky Shops, sold his shares at $ 15 each just a few weeks before). In November, 1972, Giguère sold his shares to P. Lawson Travel at $20 each, making a net gain of $95,000 in just five months. The Crown alleges this was the payoff to Giguère for using his influence to get the lease extended. Giguère says he was just exercising an old option offered to him by Louis Lapointe, a major Sky Shops shareholder, and denies intervening in any dealings between the company and the federal government over the lease.

The RCMP felt there was sufficient evidence to prosecute and gave the necessary documentation to Quebec Solicitor General Fernand Lalonde’s staff on February 10 of this year. The material was then handed over to Quebec assistant Crown attorney Joseph Tarasofsky for prosecution. But the Quebec government wanted to proceed first with a pré-enquête, a closed judicial hearing used in the cases of socalled “public figures” to decide if there is enough evidence to send them to trial. The only defendant at the pré-enquête was to have been Giguère. The Quebec government has used this process before in criminal proceedings involving prominent Liberals to save them initial embarrassment from having their cases aired in public. Liberal MP Antonio Yanakis and Liberal MPP Gerard Shanks, charged with corruption, were both granted a pré-enquête.

But the RCMP apparently balked at the procedure in this case and transferred the file to the Ontario government prosecutors, an option that was available because the alleged crime took place in both provinces. The Quebec government was furious and accused the RCMP of a double cross. To save face, the Quebec government then announced intentions to start the pré-enquête into the Sky Shops case even though charges had already been laid in Ottawa. But legal authorities doubt Quebec can sustain its own prosecution now that the case is being tried in Ontario. Some federal justice officials felt the Mounties had taken the law into their own hands and Quebec still had a right to pro-

ceed. Said one: “It’s absurd to think Quebec would cover it up.”

With or without jurisdictional battles, the case could unwind slowly. The accused have not even entered their pleas yet (although Campbell, asked by a reporter if he was guilty, replied, “Of course not”) and have yet to say whether they want a trial by jury or by a judge alone. They have employed top-flight lawyers: Giguère was represented at the arraignment by Bruno Pateras, a friend of former cabinet minister André Ouellet and Crown prosecutor in the celebrated antitrust case against the major sugar refiners. Campbell, Lapointe, and Brown are to be represented by J. J. Robinette, who defended Maple Leaf Gardens president Harold Ballard at his trial. But the major battle could be fought in the House of Commons, not in the courtroom. The Sky Shops affair presents yet another challenge to the Trudeau government, already reeling from the “judges affair.” IAN URQUHART