Questions of ethics

The opposition attacks a Tory senator

BRUCE WALLACE November 13 1989

Questions of ethics

The opposition attacks a Tory senator

BRUCE WALLACE November 13 1989

Questions of ethics

The opposition attacks a Tory senator

The controversy differed in detail from past embarrassments that have cost Brian Mulroney’s Conservative government half-a-dozen ministers—some of whom were later reinstated—since 1985. But once again, it sparked a cacophony of furious accusations and angry denials. For four days last week, opposition MPs hounded the government over published allegations that Conservative Senator Michel Cogger had broken the law by, among other things, receiving money from a federal Crown corporation. During several heated sessions in the House of Commons, opposition MPs demanded that the government order a public investigation into the business activi-

ties of Cogger, a close personal friend of Prime Minister Brian Mulroney since both men were university students. But the Tories refused. Instead, they insisted that the Senate should look into the allegations, an approach that the frustrated opposition described as stonewalling. At one point, Liberal MP Peter Milliken shouted from his Commons seat,

“This man should be in jail.”

Milliken’s outburst underscored the ugly tone of the debate and clearly unsettled Cogger and the Tories. The embattled senator had already denied the allegations, and the next day Cogger formally requested that the Senate convene a special committee to examine the affair.

“They are pillorying me and I want to remove the allegations from the House where partisanship reigns supreme,” Cogger told Maclean’s last week. “The Senate will be a fair forum which will take a level-headed look at things.” Cogger’s request sent Liberal and Conservative Senate leaders scrambling to determine how such a committee of inquiry should be conducted. But even if the focus of the debate switches to the floor of the upper house, the furor over Cogger’s activities is unlikely to fade soon. Last week, the RCMP began examining the allegations to determine if enough evidence exists to launch their own investigation into whether Cogger has broken the law. And Maclean 'shas learned that Cogger—on the advice of his

lawyers—is likely to withdraw his request for a hearing before the Senate if the RCMP decides to proceed with an investigation.

The allegations against Cogger were based on reports in the daily Montreal Gazette, which had been investigating the senator’s activities for a year. On Oct. 31, the newspaper reported that, between 1986 and 1988, Cogger wrote covering letters for legal bills totalling $74,250

to the Federal Business Development Bank (FBDB), a Montreal-based Crown agency that lends money to small and medium-sized businesses. Section 14 of the Parliament of Canada Act prohibits senators from being “a party to or concerned in any contract in which the public money of Canada is to be paid.” The invoices were sent after Mulroney appointed Cogger to the Senate in May, 1986, while Cogger was still employed as an adviser to the Montreal law firm Lapointe Rosenstein—the company that received the FBDB cheques. Late last week, however, FBDB president Guy Lavigueur issued a statement declaring that a

review of the federal agency’s files had turned up no record of work by Cogger.

As well, The Gazette alleged that, in 1987, Cogger lobbied Lavigueur for a $100,000 loan to the University of Sherbrooke, where the senator is on the board of governors. The university then used the money, the paper said, to pay for the production of a home-study course in business management, which was distributed exclusively by Pluri-Canaux Ltd., a company in which Cogger had a minority holding at the time. Cogger denied that he lobbied the bank for the loan.

Finally, The Gazette reported that Cogger had been paid $2,500 by Hydroméga Developments Inc. on June 14,1988, one day after the Montreal-based engineering firm received final approval for a $340,000 federal contract.

For his part, Cogger claimed that the $2,500 was for other services he carried out for the firm. And although he acknowledged that he arranged a luncheon meeting between federal officials and two backbench Montreal-area Tory MPs, Cogger denied that he lobbied federal bureaucrats to persuade them to award the contract to the Montreal firm.

In the Commons, the opposition parties—recalling earlier scandals that brought down several Tory ministers, among them former national defence minister Robert Coates and former industry minister Sinclair Stevens— were quick to seize upon the allegations. Said Liberal MP Robert Kaplan, a former solicitor general in the government of Pierre Trudeau: “This is a Marcos-style government where those who are close to the Prime Minister, those who helped him in his political career, his old cronies, find themselves in line to get rich.” The Liberals and New Democrats called for Cogger to resign from the Senate and demanded that the government recover the money that the FBDB paid him.

For their part, Tory ministers scrambled to limit any political damage from the allegations, insisting initially that any investigation was up to the Senate—traditionally referred to in the Commons as “the other place.” Said Solicitor General Pierre Blais: “The matter is before the other place and it should be dealt with internally.” But that defence outraged opposition members, including NDP Leader Edward Broadbent, who declared later to reporters: “What was astounding for me was to hear the solicitor general say, in effect, that a senator is above the law of Canada. Mr. Blais was an embarrass-

ment for the whole legal profession.”

But the government strategy in the Commons also unsettled some Tory senators. Said one as the controversy unfolded: “Deflecting the problem to the Senate is fine, but we have no game plan to deal with it over here. We are making the plays up in the huddle.” And despite the apparent confusion in Tory ranks, the Liberal leadership in the Senate showed no eagerness to embroil itself in the controversy. In fact, Liberal Senate Leader Allan MacEachen initially rejected calls for a Senate inquiry. Observed Liberal Senator Colin Kenny: “The rules are clear: you do not take government money.

But it is not up to us to enforce the rules, we are not judges.”

And privately, Liberal senators acknowledged that a Red Chamber investigation would take some of the political heat off the government in the Commons. For one thing, opposition attacks on defensive ministers are recorded by television cameras in the lower house that are absent from the Senate. Other senators worried that an inquiry might eventually be used to seek out wrongdoing by members of their own party as well. Said one Liberal senator:

“Once you open an investigation, you never know what trouble you might get your nose into.”

In fact, Cogger provoked anger among some Senate colleagues when he read a curt statement to the chamber on the day the allegations were first published. Acknowledging that he had been a counsel to Lapointe Rosenstein, Cogger added, “It is my understanding that several senators act in a similar capacity.” Said Liberal Senator Royce Frith, also a lawyer: “If the insinuation is that other senators are receiving public monies, my response is: I do not.” But Cogger told Maclean ’s that he did not mean to imply any wrongdoing by other senators. Said Cogger: “All I meant was that several senators work for law firms. End of similarity.”

But Mulroney appeared determined to deflect criticism from Cogger and shift the spotlight onto the Liberals. When pressed by reporters about his friend’s activities, a visibly angry Mulroney retorted, “Did you say Senator Argue?”—a reference to Liberal Senator Hazen Argue, who is under RCMP investigation over allegedly improper use of his senatorial travel-expense privileges. But, for their part, the Liberals quickly drew distinctions between the Argue and Cogger cases. Said Kenny: “The Argue matter is about something which we regulate internally: his alleged misuse of Senate funds.”

Mulroney’s visceral and partisan reaction to the furor demonstrates both his frustration over the Cogger controversy and his intense loyalty to one of his most trusted political lieutenants. The two men have been friends

since their days as law students at Quebec City’s Laval University in the early 1960s. Cogger was an usher at Mulroney’s wedding in 1973, the chief organizer of Mulroney’s failed 1976 leadership bid and a leader of the 1982 movement that ousted Joe Clark and installed

Mulroney in the Tory leadership a year later.

Since then, Cogger has been touched by several embarrassments, most of them triggered by business disputes involving his clients. In 1985, as a lawyer for businessman Walter Wolf, he became involved in a controversy over a lawsuit when Wolf tried to recoup money lost in the bankruptcy of Halifax-based East Coast Energy Ltd. That suit brought Cogger into conflict with several senior Tories, including Alfred Doucet, a former chief executive of the company who was also a senior Mulroney aide in the Tory’s first mandate.

But Cogger worked diligently to resurrect his political fortunes. Said Tory Senator Nathan Nurgitz: “Unlike some others, Cogger came into the Senate, rolled up his sleeves and asked what he could do to help.” Cogger also quietly began shoring up the party’s Quebec organization in 1988, and was rewarded later that year when Mulroney appointed him national co-chairman of the Conservative election campaign, which swept 63 of Quebec’s 75 seats.

¡2 Still, in mid-campaign, Cogger’s I name surfaced again, in connection u with yet another lawsuit between two S feuding businessmen. A Japanese iny vestor, Takayuki Tsuru, was trying 5 to recover $39 million that he had invested in two companies owned by one of Cogger’s clients, Quebec industrialist Guy Montpetit. But a judgment in that case cleared Cogger of any impropriety.

Still, last week’s allegations were clearly the most serious Cogger has faced. And because of the sensitivity of the case, some Tories said that they would prefer to see the investigation conducted by the RCMP rather than by a Senate committee, where public hearings might give rise to politically damaging headlines. In addition, other Tories worried privately that only a police investigation would put the matter to rest. Said one senior Tory close to Cogger: “People view the Senate as a self-regulated club and doubts will remain even if he is exonerated. But there is a finality to things when the RCMP closes the books on a case.” Indeed, some Tories plainly fear that a Senate hearing will remove the controversy from the Commons, only to revive it in the “other place,” provoking a fresh display of partisan wrangling among Liberal and Tory senators. “Mulroney will want us to save him, and that is going to mean twisting some arms,” said one Tory senator. For his part, Cogger confided to a friend that the latest round of scandal will mean “being sent to political purgatory for a while.” Cogger has been there before. But this

5. time, the combativeness that helped bring him 0 back before may be facing its most trying test. z