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American Diplomacy
Commentary and Analysis

April 2005

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In another of his analyses of Canadian political developments for American Diplomacy, David T. Jones offers our readers some background on the current "Adscam" scandal and its potential deeper implications for the future of Canada.— Assoc. Ed.

scandal in the Great White North

Most Americans regard Canadians -- and Canadian politics -- as dull. Of course, if you are not content without blood in the streets, Canada would not be sufficiently sanguinary for you. But if you delight in complex political drama featuring stilettos rather than broadswords, you can find more than enough to engage your interest.

At the moment, a federal commission has revealed a complex kickback scheme featuring a selection of Liberal party advertising firms in Quebec. Testimony has implicated a substantial element of the Liberal party and offers the Conservative opposition the opportunity to force an election through a "no confidence" vote. The Government is flailing, attempting to deflect blame; the Conservatives are attempting to determine whether citizens are sufficiently sickened by sleaze to "throw the bums out."

Some Background. The current drama, media nicknamed "Adscam," has been an attempt to account for upwards of $100 million (Canadian) spent on advertising contracts in Quebec ostensibly to promote Canadian unity. These contracts, in theory, were designed to put a deeper "Canada" brand into Quebec following the narrow 1995 defeat of a separatist referendum that would have moved Quebec toward independence.

The extent of these expenditures had been seeping slowly into Canadian consciousness for several years. The Auditor General first called attention to the problem of several specific billings for little/no work in 2002, e.g., a $500,000 contract for which no report was ever located. It was not, however, until February 2004, with the release of a comprehensive Auditor General's report specifying the missing $100 million and indicating questionable activity by several senior appointed officials such as the head of Canada Post and Via Rail.

The Auditor General delivered the report at a particularly inconvenient time--the nexus when a new Liberal prime minister (Paul Martin) was replacing the long time party leader and prime minister (Jean Chretien). There was significant ill will between out going and incoming leaders; indeed, Chretien had been jettisoned by Martin after rivalry that had endured for almost 20 years. During his years as prime minister, Chretien had become increasingly inflexible in centralizing his authority and evolved into more of a "godfather" than a "little guy" of populist, rough-hewn charm that had been his original persona.

Recognizing that the Auditor General's report was both a challenge and an opportunity, Martin elected the "I'm mad as hell and going to get to the bottom of it" approach to the "Where has the money gone?" question. In contrast, Chretien would have stonewalled, denied, obfuscated, suggested investigations and toothless reviews, and found ways to reduce the mountain into an apparent molehill.

The first investigatory effort, in spring 2004 was a parliamentary review. Senior bureaucrats and former Liberal ministers were called to testify about "what they knew and when they knew it." There was a remarkable dearth of records and a lot of forgetting. There was also intensely politicized questioning and non-answering by members of parliament who anticipated an immediate election.

That election, held in June 2004, resulted in a minority government--the first in Canada since 1979. A revived opposition, which had just combined the two right-centrist parties, gained seats. Almost equally important, the Quebec separatists exploited Quebecker irritation that public funds were being diverted into Liberal-oriented advertising firms to buy them with their own money. The separatists equaled their previous high in seats.

The Gomery Commission. Replacing the fractious parliamentary review, the Government opened a juridical commission headed by a tough, respected jurist, John Gomery. After months accumulating evidence, Gomery began taking testimony under oath from a wide variety of witnesses including former Prime Minister Chretien and PM Martin. Chrétien professed ignorance of all activity associated with the advertising program in testimony largely regarded as contemptuous of Gomery. Martin declared that he was out of the loop and knew nothing about what had been happening. As Chrétien wouldn't tell Martin the time of day regarding Quebec activity, Martin's protestations appear truthful. However, as he was also the political heir apparent, the Finance Minister, and technically the ranking Liberal official in Quebec, his ignorance could also be regarded as willful.

Subsequently, however, Gomery began taking testimony from executives in the Quebec advertising firms who are facing court trials regarding the missing monies. Here Gomery elicited testimony, which although assumed accurate is still unproved, to the effect that Liberal Party officials demanded kickbacks for advertising contracts, orchestrated payments to Liberal Party funds, required hiring of Liberals who did no work other than campaign activity. The work done by the firms was close to nonexistent, shoddy, over priced, and not restricted to the theoretical effort to make "Canada" more attractive to Quebeckers.

Testimony was initially taken under a publication ban, that is, it was known to individuals in the court room including political party officials and media, but not permitted to be published so as not to prejudice a jury in the pending court trials of those testifying before Gomery. The information, however, was so dramatic that it quickly leaked; most pertinent details appeared instantly on U.S. "blogs." Within days the publication ban was largely rescinded, and the Liberal Government forced to address the worst Canadian financial scandal in perhaps a century.

Current Circumstances and Projections. Today, to cite words from the 1970s, "you don't have to be a weatherman to know which way the wind is blowing." The Liberals are plunging in polls across the country as if they were birds trying to fly with anvils tied to their necks. A respected poll earlier this week was quite remarkable: the Liberals lost ground in every regional, gender, age, education, and income category being measured. In almost every instance, they lost at least 10 points.

Obviously, the Liberals are desperate. Their efforts to fend off an election verge on the comic. They profess commitment to due process and letting the Gomery commission play itself out till the end of the year. The punch line of the old joke is implicit in their gyration: "And the horse may learn to sing." Even from 500 miles away in Washington, it is hard to keep a straight face when hearing Liberal spinners contend that it is the Liberal Party that has been the victims of a few who have betrayed their trust. Many suspect that the revelations in Quebec were duplicated in Liberal party operations across Canada.

The Conservatives and other opposition parties must decide whether to call for a spring election based on these polls. Although the numbers are positive, the polls also suggest that the electorate is not enthusiastic about the Conservatives--or having another election only a year after the last.

Doubtless there is more to be revealed in the Gomery investigation. But while tossing more turds on an overflowing midden may be intellectually satisfying, it isn't going to make it smell any worse. Indeed, it only defers the necessary clean up. Regardless of who wins the next election, Canadian politicians have a challenge in restoring domestic trust and international respect.

Almost equally dangerous for Canada is the revival of the Quebec separatists. The federalist Liberals are being comprehensively depicted as institutionally dishonest and undemocratic. Although no provincial Quebec election is scheduled for at least 2 years, the chances for a separatist victory have risen dramatically. As any experienced observer knows that a week in politics is a lifetime, it would be apocryphal to suggest a sequence stemming from "Adscam" that leads to Quebec independence.

Nevertheless, it is ironic that a program ostensibly designed to reinforce Canadian unity has provided separatists with their greatest impetus since 1995.


David T. Jones earned bachelor’s and master’s degrees at the University of Pennsylvania. Retired from the U. S. Foreign Service, he lives in Arlington, Virginia. He has written extensively over the years for U.S. and Canadian publications, including this journal.

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