"Adscam widens"

Headline on Politicswatch main page for Feb. 18. Developments:

The Conservative Party raised the issue of a 1994 memo written by Martin aide Terrie O'Leary when the PM was at finance that recommended Groupe Everest to conduct work on the government's 1994 Retail Debt Strategy. This was three years before the sponsorship program was launched.� The memo begins, "Just wanted to outline some suggestions from myself and the minister regarding the proposal for our 1994 Retail Debt Strategy." "We agree that it makes the most sense for the strategy to be developed by Gingko/Groupe Everest in collaboration with the market researchers, rather than another ad agency," O'Leary wrote. "In addition, Gingko/Groupe Everest should also serve as project manager/co-ordinator for the public relations firms which are appointed."� In the House, Tory MP Peter MacKay asked the prime minister, in light of the memo, "Does the Prime Minister expect Canadians to believe his special request for the addition of Groupe Everest was not politically motivated and that with all those connections to his office he was not aware of its actions until 2002?"

Would that be the same Groupe Everest whose president is Claude Boulay, who worked on Martin's 1990 leadership campaign? The same Groupe Everest that has been awarded a further $2-million in federal advertising contracts in the last two months, ie since PM became PM � and since the receipt of the A-G's report? Then there's this:

Prime Minister Paul Martin's communications director was the senior public servant in charge of the government's communications strategies during most of the sponsorship and advertising scandal, but he denied any knowledge that "people were actually stealing money." Mario Lague admitted Tuesday he was questioned by investigators from the auditor general's office over poor record-keeping at the Privy Council Office from 1998-2003 where he was the assistant secretary to cabinet's communications committee, headed by former public works minister Alfonso Gagliano. He also admitted having several meetings on the sponsorship program with Chuck Guite, the former public works official at the centre of the fiasco and one of several people blamed by Auditor General Sheila Fraser for bending the rules to select Quebec advertising firms in a covert fight against separatism. While Guite talked to him in "general terms about the need (for Ottawa) to be visible" in Quebec, Lague stressed he had no idea of any wrongdoing in the program. ... Hired as assistant deputy minister in charge of communications strategy in 1998 after working on the 1995 Quebec referendum, Lague denied the $250-million sponsorship program was ever raised at Gagliano's cabinet committee or in other discussions he was involved in.

Well, it's probably nothing. But then there's this story: Audit detailed misuse

OTTAWA -- A 2000 Public Works internal audit that Prime Minister Paul Martin says only highlights the sponsorship program's "administrative failures," in fact details double-billing by ad agencies and alleges fraud. The 1,180-page audit points out specific instances in which ad agencies billed for items they didn't produce or expensed travel that wasn't linked to the sponsored event. Martin has insisted it wasn't until a 2002 auditor general report, which found that public servants broke the rules when they handed Groupaction $1.6 million for three almost identical reports, that he realized how serious the problems were in the $250-million sponsorship program. But the internal audit is plastered with examples of questionable billing practices by ad agencies and secret deals between those firms and public servants...

And this:

As the scandal and its aftermath raged on yesterday, opposition MPs angrily pounced on evidence that Industry Minister Lucienne Robillard took part in discussions with an official of one of the crown corporations that helped funnel taxpayers' money to Liberal-friendly ad agencies. MPs demanded an explanation of why, according to testimony in a Quebec court case last year, Robillard met a senior official of the Business Development Bank of Canada in 1998 to discuss sponsorship-related issues... The official, Jean Carle � who went to the BDC after leaving his job as an aide to former prime minister Jean Chr�tien � testified that he arranged discussions with Robillard and other Liberals to ensure that the crown corporation helped Ottawa promote federalism in Quebec... Carle testified that he also arranged sponsorship-related talks with then-cabinet minister Martin Cauchon, former public works minister Alfonso Gagliano and now-retired public servant Chuck Guit�, who signed the cheques in the sponsorship operation. But Robillard turned aside the queries. "I have no memory of these meetings," she said during a raucous Question Period. She referred MPs to the Quebec Superior Court transcript, in which the judge dismissed Carle as a non-credible witness... Cauchon said he had no "precise" recollection of a meeting with Carle on sponsorship-related matters.