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ST.
JOHN'S, NFLD. - Advertising
contracts worth almost $800 million tax dollars face a
searching judicial review - in addition to the programs
in the controversial $250 million sponsorship affair,
the Star has learned. The tainted sponsorship program,
spread over six years, has captured much of the public's
attention. But Ottawa spent much more - $793 million over
five years - on an advertising program that saw many big
contracts go to some of the same firms named in the sponsorship
affair. Auditor-General Sheila Fraser criticized a failure
of government controls over much of that money as well
as a failure to follow the rules on selecting contractors.
"We
are looking at further changes. There are going to be
options that will be brought forward on advertising and
procurement," said a senior government source, speaking
on condition he not be named. "It is not something
that's escaped our notice and attention." The insider
added there are already discussions over what reference
should be made to advertising and procurement policies
in Judge John Gomery's mandate. Prime Minister Paul Martin
said yesterday in St. John's a broad overhaul is needed.
"Essentially I think that there is a whole series
of problems having to deal with controls, lack of controls
... that I think that we have got to deal with,"
he said.
Meanwhile,
there are signs the government may have difficulty recouping
funds from advertising firms. Last month, Ottawa quietly
paid out another $323,000 to Gosselin Relations Publiques
Inc. after a Quebec judge ruled in favour of one of the
key firms named in the sponsorship affair, the Star has
learned. The payout signals the court believes the Montreal
firm, once involved in federal contracts to sponsor the
Maurice Richard television series and the RCMP's 125th
anniversary, was legitimately owed money for work done.
The
federal government is also battling a second lawsuit from
another Montreal ad firm with ties to the Liberal party.
Jean Lafleur Communication Marketing Inc. is seeking payment
of $211,000. The federal government continues to contest
the claim. "The crown has filed a defence and counter-claim
in the amount of $449,500," against Lafleur, said
Pierre Teonio, a spokesperson for the Public Works Department.
"This matter remains before the courts and there
are no other civil suits under way," he said.
Yet,
documents obtained under access to information provisions
indicate the federal government has also been hit up with
a "demand letter" for payment of $1.1 million
by an unspecified company or companies. The demand has
"potential to become a legal claim," according
to a September, 2003, update on the actions taken by the
department to contain the scandal. In all, it says that
as of September, the government had "recovered"
only $101,000.
The
government has withheld nearly $4 million from a group
of firms, unnamed in the documents.
The
sponsorship program cost the taxpayer $250 million between
1997 and 2003, with $100 million of that going to Liberal-friendly
firms in Quebec.
Spokespersons
for the Public Works Department could not explain this
weekend why the government decided not to appeal the Quebec
Superior Court ruling issued Dec. 9 to pay the $323,000
to Gosselin. In January, the Department of Justice advised
the government to pay the full amount, plus interest and
costs, as ordered in the judgment, said Teonio.
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