Lid blown off Grit scandal

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This article was published 08/04/2005 (7655 days ago), so information in it may no longer be current.

MONTREAL — The story Jean Brault told to the Gomery commission can now be told to all, and it is a riveting tale of rampant political corruption and flagrant abuse of taxpayer dollars.

“There is mounting evidence, a mountain of evidence, that this government was involved in a criminal conspiracy of the likes never seen in this country,” said Deputy Conservative leader Peter MacKay in the Commons, minutes after a publication ban on Brault’s testimony was lifted.

If Brault’s story stands up, it could bring down Paul Martin’s badly shaken Liberal government.

The federal Liberal party — through its Quebec wing — is by far the most deeply wounded by Brault’s jolting allegations of influence peddling, but he also testified he made illicit payoffs to both the provincial Liberals and the Parti Québécois.

He said that over a period of nearly six years, he funnelled an estimated $1 million — most of it in under-the-table payments, some in cash-stuffed envelopes — which were aggressively solicited by highly placed Liberals, in return for tens of millions in federal government contracts between 1996 and 2002.

To help cover his political payouts, Brault said he regularly padded his bills on government contracts.

He identified a host of well-placed Liberals as active or tacit participants in the scheme, including two former directors-general of the federal party’s Quebec wing — Michel Beliveau and Benoit Corbeil. He alos identified Joe Morsellin and Tony Mignacca, two close associates of former Public Works minister Alfonso Gagliano, whose department ran the sponsorship program, and Jacques Corriveau, a backroom power broker and longtime friend of former prime minister Jean Chrétien.

“It’s right out of the Sopranos (television show) with brown bags and Italian restaurants,” Manitoba NDP MP Pat Martin said.

“I think the time for an election is now,” Martin said. “We can’t in all good conscience work with this government knowing what we know now.”

Brault’s testimony ran over six days this week and last, but could not be reported until yesterday when Judge John Gomery, who heads the inquiry into missing millions from the federal sponsorship program, lifted a publication ban on the testimony, with the exception of some passages relating to Brault’s relationship with Charles Guité, the federal bureaucrat in charge of the program.

Brault and Guité will jointly stand trial in June on fraud and conspiracy charges in connection with their sponsorship program dealings.

Brault is the former owner of Groupaction, an advertising firm that got the lion’s share of contracts from the $250-million sponsorship program intended to promote national unity in the wake of the 1995 sovereignty referendum. The inquiry was mounted after the auditor general charged that $100 million of the money went to Liberal-connected Quebec ad firms without proper accounting.

Brault’s firm got $61 million in contracts from the program, and another $112 million in unrelated federal advertising contracts from which he and his wife drew $3.2 million in salaries and bonuses.

Brault said he quickly realized that the “magic recipe for success” in scoring government contracts was to do favours for the party in power, and that generally meant forking over money for what party people called “the cause.” He said the cause, as he understood it, was the Liberal party.

Unlike some previous witnesses with faulty memories, Brault was almost eagerly forthcoming in his testimony, which was rich in detail and flavour, and backed by voluminous documentation. Some spectators at the hearings even applauded him for his frankness after he left the stand for the last time.

Some of the more damning allegations include:

That he entered into a straight kickback scheme through which he paid Corriveau a 10 per cent cut amounting to $430,000 from Groupaction’s commissions on a $42 million series of sponsorship contracts his firm handled.

That he kept a succession of Liberal party operatives on the Groupaction payroll while they worked full-time for the party. The most prominent was Alain Renaud, to whom he paid $1.1 million to be his “door opener” at upper levels of the Liberal party and the federal government.

That he offered a $100,000 bribe to keep a federal advertising contract, an offer accepted by Morselli, who demanded the money in cash. Brault said that he paid $25,000 of it in an envelope he delivered to Morselli at a Gagliano fundraising dinner.

That he was persistently hounded for money by Liberal party officials and agents, including a demand for $400,000 after the 2000 federal election with the assurance from Corbeil that his contribution would be covered by future government contracts.

That 230 three-day tickets to the 1998 Montreal F1 grand prix race worth $264,000 were paid for through a padded sponsorship contract handled by Groupaction.

That he was advised by Parti Québécois officials on how to slip the party money from his company by routing it through small personal donations by compliant employees in violation of provincial party financing laws. He said he gave the PQ $100,000 over two years, and $50,000 in one year to the provincial Liberals, though in this case he routed the payment through another advertising firm.

Brault said that his payment to the PQ was among his first covert political contributions. Asked if it was, in fact, his first, he replied: “It’s amusing, if that’s the case.”

Records show that Brault made $166,000 in legitimate contributions to the federal Liberal party, but he said he handed over many hundreds of thousands more in illicit payments solicited by party officials. He said they would pass him party bills for things like catering Liberal fundraising events, and for renovations to party headquarters and the party website.

He said he didn’t always pay, but that most of the time he did.

Brault said he never got any explicit overtures from cabinet ministers or other elected Liberals, though he did favours for some of them directly or indirectly.

He said he once gave $4,000 to one of Chrétien’s brothers, Gaby, ostensibly in aid of promoting “the cause” on the South Shore, and for a time he hired one of Chrétien’s nieces in his design department. He also steered $180,000 in contracts to a printing firm that employed Gagliano’s son, Vincent, and retained Guité’s son-in-law, who operated a limousine service, for $30,000.

He also described a project to produce a CD-ROM for distribution in schools as part of a campaign to discourage schoolyard bullying. The original estimate for the project was $200,000, but it wound up costing $1.1 million, and in the end the product was never distributed.

He told how $200,000 in sponsorship money largely went to finance a souped-up Camaro owned by a Groupaction employee that ran in stock car races around Quebec, where the firm was contracted to provide visibility for the federal government. The visibility consisted essentially of cheap stickers on the bumpers of the cars in the races.

Some of the episodes Brault recounted had a decided “Goodfellas” flavour.

He told of an occasion when Morselli summoned him to lunch to meet a Liberal fundraiser, Beryl Wacjman, whom he was being pressured to put on the Groupaction payroll. He said a deal was worked out to pay Wacjman $5,000 a month cash, and that he delivered the first payment in a plain envelope that he left on the table while he went to the washroom. He said when he returned, the envelope was gone and nothing was said about it during the rest of the meal.

He said Morselli would refer to higher ups in cryptic terms. At one point he referred to “the choo-choo man” whom Brault took to be an unnamed Via Rail official; Corriveau was colloquially referred to as “Tête Blanche” (white head) and the word from senior Liberals was that he should be given anything he asked for.

When the sponsorship affair began to unravel in 2002, after the auditor general complained about $550,000 Groupaction was paid for a report that could not be found in government files, he arranged a meeting with Morselli at an upscale Montreal club.

He said he feared Morselli would come wearing a secret taping rig and would try to lure him into making incriminating statements, so he arrived early for the meeting and jacked up the heat in the private dining room reserved for the meeting so as to make Morselli take off his jacket.

Brault said he was reassured when the ploy worked and Morselli was wearing only his shirt under the jacket.

He said he paid only half the $100,000 that Morselli demanded in cash for assuring that Groupaction would retain a lucrative contract to promote the federal firearms registry, $25,000 of which he had delivered at a Gagliano fundraising dinner.

He said when the deal originally went down, Morselli told him: “$100,000 cash and your problem is solved.”

But he said Morselli asked him for the other $50,000 even after Groupaction was smeared by the mounting scandal and its clients were deserting it en masse.

“I thought they had a lot of nerve, and that’s a polite way of putting it,” said Brault. “I told them to forget it, I don’t have a business any more.”

He said that when he tried to unload Renaud after five years of keeping him on the Groupaction tab, Morselli threatened him with the loss of a Via Rail advertising contract if he didn’t rehire him, though a more senior Gagliano aide later told him that the threat was idle, and that he could keep his contract either way.

— CanWest News Service