Angry in the Great White North

Amid the consternation over whether the Liberals are going to ignore a non-confidence vote, the Gomery Inquiry is trundling along. Michel Beliveau testified:

A former senior Quebec Liberal broke into tears yesterday after he recalled how he dealt with the party's financial emergencies by asking for more than $300,000 in cash from people connected to the sponsorship program.

Michel Beliveau, who was director-general of the Liberal Party's Quebec wing from 1996 to 1998, told the Gomery inquiry that he sought unreported cash donations three times from a friend of former prime minister Jean Chretien and once from a lobbyist.

Mr. Beliveau is the first party official to back up in testimony claims that illicit cash payments were used to cover party expenses while Mr. Chretien was prime minister.

Mr. Beliveau is telling the few-rotten-apples version of the story, and that his political masters were squeaky clean:

A jittery Mr. Beliveau acted repentant and insisted he acted alone and never informed other Liberal officials. "It was me and no one else. I'm taking the responsibility."

Mr. Beliveau was also a riding organizer for Mr. Chretien. He said that, as "a loyal man," he had advised Mr. Chretien that he had been subpoenaed to testify.

"Just tell the truth," he said Mr. Chretien told him.

But Michel Beliveau's name has come up before in the Placeteco affair. Yeah, I know, the list of scandals is mind-numbingly long. But here goes. From the excellent summary by Andrew Coyne:

In 1996, Mr. [Claude] Gauthier, a long-time friend of the Prime Minister's, bought a parcel of land adjoining the golf course for $525,000, enabling it to retire a $300,000 debt. (He also contributed $10,000 to Mr. Chretien's re-election campaign in 1997, the largest single contribution it received.) Not long before he agreed to buy the land, one of Mr. Gauthier's companies, Transelec, was told it would be awarded a $6-million contract to build an electricity network in Mali for the Canadian International Development Agency. The Auditor General has since found the company was ineligible to bid on the contract.

That was not the only federal money Mr. Gauthier received. In 1998, Mr. Gauthier bought a plastics manufacturer called Placeteco Inc., with the help of a loan from the National Bank. The company was then in bankruptcy proceedings. Yet not long after, the struggling company received a $1.2-million TJF grant. Once again, the Prime Minister's office had intervened, urging bureaucrats in charge of the file, who had expressed reservations about the company's eligibility for assistance, to do "everything legally possible" to see the grant went through.

I bet the bureaucrats were helpful. Look at this:

Placeteco Inc.
3763 rue Burrill
Shawinigan, Qc G9N 6T6
Tel: 819-539-8808
Fax: 819-539-9224
mbeliveau@placeteco.com

Contact: Michel Beliveau, directeur commercial

How convenient. And how did they move that $1.2 million despite the reservations of some (honest) bureaucrats? From Mr. Coyne:

In fact, they did more than that: the money was placed in a secret trust fund, in violation of federal spending rules. The trust fund was managed by Gille Champagne, a fundraiser for Mr. Chretien. Mr. Champagne then signed the money over to Mr. Gauthier -- who used it to pay back the bank. Indeed, documents revealed that had been the condition on which the loan was made. Yet the condition on which the grant was made was that it be used to "create jobs." When, a short while later, the company went bankrupt, other creditors were aggrieved to learn the bank had been bailed out ahead of them, with public funds. They were perhaps more aggrieved when, thus relieved of its debts, the company was repurchased by Mr. Gauthier.

You have to give "da boss" credit. The way these guys played with money, it's awe-inspiring.

This scandal was even brought up in the House of Commons:

Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, Michel Beliveau, the former director general of the Liberal Party of Canada's Quebec section, now the vice-president of the Liberal Party of Canada, who attended the Liberal convention on the weekend, who is a friend of the Prime Minister, is also a consultant for Placeteco.

My question is for the Prime Minister. Is it the presence of Mr. Beliveau, a friend of his in the Placeteco matter, that made him slow off the mark in calling for an investigation into this matter as he did in the case of the Canadian Institute of Tourism and Electronic Commerce?

[English]

Hon. Jane Stewart (Minister of Human Resources Development, Lib.): Mr. Speaker, I categorically reject the assertions of the hon. member. I say again, on a number of occasions we have talked about administrative errors made on this particular file. Those were corrected.

At the same time it is clear to us that continuing to invest in Placeteco and Techni-Paint was the wise thing to do. These projects were supported by the Bloc member in one case, by the Government of Quebec in both cases, and we see today that 170 people are working at those plants.

[Translation]

Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, everyone is wondering how the $1.2 million that went to Placeteco was given the way it was. That is the minister's explanation.

Then there is Claude Gauthier, who received a grant of $1.2 million and who bought the properties from the Prime Minister for $500,000; Gilles Champagne, who is a HRDC trustee and Claude Gauthier's lawyer; and Michel Beliveau, who is a friend of the Liberal Party and consultant for Placeteco.

Oddlly enough, none of this background is being mentioned by anyone covering Michel Beliveau's testimony in the main stream media or in blogs. Too bad. It certainly puts his teary performance in a whole new light.