They are laughing at us

It's possible that André Ouellet thinks he is dealing with fools. It's possible, with regard to the Public Accounts committee, he is. But there should be no doubt that his appearance before the committee was every bit as much of a charade as those that preceded him. All the elements were there. There was the wounded victim routine: his life had been "a living hell" in the weeks since the Auditor General's report appeared, he told the committee. (Although Greg Weston tells a different story.) There were the usual astonishing gaps in knowledge: he was unaware of Jean Lafleur's Liberal connections, he declared, straightfaced, at the time he was funneling hundreds of thousands of dollars in public funds his way. If so, he was the only man in Quebec who was. But perhaps in twenty-odd years of running the Liberal party machine in Quebec he had never run into him. No, that can't be right: he's reported to have dined at his cottage, a lavish affair attended by such notables as Marc (Via Rail) LeFrancois, Jean (Francois Beaudoin) Carle... and Jean (strutting bantam in epaulets) Lapierre! And there were the cagey non-denial denials. The Auditor General, Ouellet humphed, had got her facts wrong. "Some of her conclusions are incorrect." Canada Post was not part of the sponsorship program. "I want to say unequivocally that Canada Post never spent any money for that purpose." "The auditor general report is not accurate," he told the committee. "I'm telling you, the auditor general could make mistakes and misinterpret what's taking place and . . . when I read this document, it's not the way it happened. Except he never actually names a single instance of where she got it wrong. For example, he is at pains to point out that the Crown corporation's $1.6-million contribution to a film bio of Maurice Richard had nothing to do with the sponsorship program, but was simply intended to raise the Crown corporation's profile, there being apparently a few Maurice Richard fans in Quebec who have never heard of the post office. But the Auditor General never said it was, or at any rate accepted Canada Post's explanation. It was the total absence of any supporting documentation -- though that was certainly consistent with everything that went on in the sponsorship program -- that worried her. Here is what her report says about the transaction:

We are concerned about a lack of documentation to support payments made by Canada Post for the Maurice Richard series. Canada Post paid L'Information essentielle $1,625,000 (plus taxes) with no signed contract. There was no signed proposal or written business case to support the decision to spend $1,625,000. Canada Post informed us that it had received a proposal from L'Information essentielle listing costs and benefits, but we found that the proposal was neither signed by L'Information essentielle nor accepted in writing by Canada Post. Canada Post also informed us that it had done a cost-benefit analysis, but it provided us with no evidence of this. Canada Post's sponsorship policy requires that it document the objectives and budget for sponsoring an event and the results it expects to achieve for its investment. Canada Post has agreed that written documentation to support its decision to be a main advertiser on the series would have been desirable. However, Canada Post informed us that it entered into this transaction in order to achieve marketing and not sponsorship objectives. Given that Canada Post was identified as a sponsor on the series and invoices indicate that it was sponsoring the production of the series, we believe that Canada Post should have followed its sponsorship policy and maintained appropriate documentation.

Of course, the Auditor General was obliged to take Canada Post's word for a lot of things, since she was unable to conduct a full audit of the corporation's books: it was all she could do to pry them open even a crack, given the corporation's -- the Crown corporation's -- jealously-guarded immunity from public scrutiny.

Through an order-in-council, we were able to audit selected sponsorship transactions at Canada Post Corporation. However, our Office did not audit the sponsorship/marketing program of Canada Post Corporation in its entirety.

On the other major transaction involving Canada Post, a competition to design a new series of stamps, Ouellet offered even less defense, conceding that it "does not look good." Indeed it does. Here's how it worked. Canada Post received $600,000 from Public Works, ie from the sponsorship program that Ouellet insists the corporation was not a part of. Lafleur Communications took the now familiar rakeoff for transferring the cheque from one arm of the government to another. Canada Post then turned around and handed the remaining $516,000 back to Lafleur, ostensibly to run the program, without competitive tender, without a contract, indeed without supporting documentation of any kind -- in common with the corporation's original decision to enter the competition, and of Public Works to fund it. Ouellet insists that "all of the money was well spent," a and that Lafleur "worked hard for the money," but in fact he has no way of knowing. Indeed, the Auditor General found that "both Canada Post and CCSB purchased similar goods from Lafleur," ie the agency billed them twice for the same services. (Ouellet says he was unaware of the government's involvement in the transaction. Yet he told the committee it was at the government's instructions that he hired Lafleur. The firm of whose Liberal connections he was also unaware.) And in any case, Canada Post was not eligible to receive any of the money in the first place. As a Crown corporation it was obliged to carry the Canada wordmark, without having to be paid to do so. And if, as Ouellet insists, the money was actually used to raise Canada Post's profile ("In [Canada Post's] view," the Auditor General carefully notes, "the stamp contest was not a sponsorship transaction but rather a marketing activity, a strictly commercial operation"), it was doubly ineligible for funding, since Treasury Board rules expressly forbid the use of transfer payments to support a Crown corporation's commercial operations. Confronted with this by the committee, Ouellet blithely offered to give the money back, all the while insisting he has been ill-used by the Auditor General! I should have said it was impossible that anyone could be taken in by this tripe -- not after Alfonso Gagliano, after Dave Stonewall, after Marc LeFrancois (How could he not have known that Via was paying hundreds of thousands of dollars to Lafleur, with whom he travelled to Europe? "I don't ask questions of people"), after Jean Pelletier, and after Reg Half-cocked's intervention. But then I read this column by John Ibbitson, and I'm not so sure.