April 28, 2005

". . . We were basically at war trying to save the country," he said of the need to direct contracts to selected firms with minimal paperwork on file.

"When you're at war, you drop the book and the rules and you don't give your plan to the opposition. You don't leave your plan of attack on your desk," he said.

Mr. Guite argued with the MPs during the two-hour meeting, refusing to answer questions on his dealings with ministers and political staff, and restraining most of his answers to only three controversial contracts worth $1.6-million awarded to Groupaction Marketing Inc.

"Based on that [oath of confidentiality], Mr. Chairman, I will decline today to answer any question that relates to discussions that I may have had with ministers," he said at the onset of the hearing, which was held in camera to avoid interfering with an RCMP investigation.

Still, Mr. Guite told the committee that he met "regularly" with then public works minister Alfonso Gagliano as often as three times a week. Last month, Mr. Gagliano said he met with Mr. Guite only three or four times a year.

Mr. Guite is now scheduled to appear before the parliamentary inquiry on the scandal on April 22 and 23. During his coming appearance, he will no longer be constrained by his oath, which has been lifted for all witnesses, and he will be free to speak about the entire sponsorship program, which has come under assault for funnelling $100-million to a handful of advertising firms.

Judging from his 2002 testimony, Mr. Guite, a former military man, loved to be in the trenches in the fight against separatists, juggling dozens of files and millions of dollars simultaneously. As the federal government pasted the province of Quebec with Canadian flags and banners, Mr. Guite was proud of his on-the-ground achievements. He added that his political bosses were happy with his work.

"They weren't kept in the dark; they saw the results that were happening. . . . They were happy with the results," he said. "I got good value, and I got good results."

During his testimony last month, however, Mr. Gagliano blamed Mr. Guite for the sloppy management of the program and the ensuing scandal. "I assumed all the paperwork . . . was in the file," Mr. Gagliano said.

But Mr. Guite said two years ago that he had deliberately kept almost no sponsorship documents on file in order to foil the attempts of separatists to uncover Ottawa's political strategy.

Mr. Guite was speaking at the time on a report by the Auditor-General that said the government had broken "just about every rule in the book" to award three contracts worth $1.6-million to Groupaction. Officially, the contracts resulted in two incomplete reports and another one that can't be found.

Mr. Guite insisted that Groupaction had provided the three reports. "I have touched them," he said.

Mr. Guite said that in addition to the written work, he paid Groupaction to provide intelligence on the various cultural and sporting events in Quebec.

"I asked them to provide me verbal advice on certain strategies and certain events, that we would know who was there, who would be there, how present would be the government of Quebec versus the government of Canada," Mr. Guite said.

Read a complete transcript of Charles Guite's testimony on our website, globeandmail.com

What Guite told MPs

Excerpts from the testimony given in camera on July 9, 2002, by retired civil servant Charles (Chuck) Guite to the public accounts committee of the House of Commons:

On the Auditor-General's 2002 report

Mr. Guit e: Contrary to the Auditor-General's comment, every rule in the book was not broken. During the referendum of 1995, my office was requested by the Federal-Provincial Relations Office to hold a competition -- I have to be careful here the term I use -- and to follow a bit of the guidelines that exist in the rules, but I may have to, for a better term, bend them a little bit, because, as you all can understand, we were basically at war trying to save the country. We, and FPRO, invited approximately 10 firms, which is documented, there's a scope of work, to present to us, as a committee, what they could do to help us win the referendum in Quebec -- which they did. Based on that, we retained five firms. Those five firms were issued contracts and, in fact, helped us to win the referendum.

Subsequent to the referendum -- obviously, as we all know in this room, it was a close call -- I was asked by a committee, if I remember right, of people from FPRO, people from [the Privy Council Office], how we would be more visible in Quebec -- the Government of Canada would be visible in Quebec and the rest of Canada, but, obviously, more in the Province of Quebec. Based on the results that Groupaction had provided to us during the referendum, I decided that was the best firm to be able to advise me on where we should be present, at what event, what visibility we should have. Obviously, we were not going to broadcast our plan and our strategy through a public tendering process and, in fact, having some information on file that could be available to the opposition.

On his dealings with politicians

New Democrat MP Pat Martin: There's a growing body of evidence, Mr. Guite, that would indicate that there was overcharging, and even charging for work that possibly wasn't even performed so that those [advertising] companies could bank credits to be recouped at a later date, or pay off services during the 1997 federal election in Quebec. Do you have any knowledge of that?

Mr. Guite: Any political things, I decline to answer any comments on the politics; I'm not involved in politics.

Paul Martin: Did anybody from the Prime Minister's Office ever contact you regarding the partnership initiative, or the sponsorship contract?

Mr. Guite: No comments, based on my initial statement [in which Mr. Guite invoked his oath of confidentiality].

Mr. Martin: Jean Pelletier is not a minister you worked for. Did Jean Pelletier call you from the Prime Minister's Office?

Mr. Guite: No comments, based on my initial comment.

On his meetings with then minister Alfonso Gagliano

Mr. Guite: What I can clearly tell you is that I met on a regular basis with the minister.

On the administrative mess

Liberal MP Shawn Murphy: One would expect to see the checks and balances and the processes that are called for in normal government operations but that aren't present in this case. It seemed to be a rogue agency reporting to no one. But my question to you, sir, is that this mess -- and perhaps you don't agree that it is a mess -- you're responsible?

Mr. Guite: Yes.

Mr. Murphy: There's no one else that you're pointing the finger at.

Mr. Guite: No.

Mr. Murphy: If there is a mess in this report, it's the sole responsibility of Mr. Charles Guite.

Mr. Guite: That's correct.

On his role during the 1995 referendum on Quebec sovereignty

Mr. Guite: I . . . bought every billboard in Quebec and every outdoor advertising that was available, okay? I blanketed. I phoned the guys in Montreal, the media people, and I said, "What's your inventory?" They said, "Oh, it's about $8-million worth of outdoor advertising that's available." I said, "I'll buy it." And the guy at the other end of the phone said, "Pardon me?" I said, "I'll buy it." That was a strategy that we then . . . I think the program at the time was Attractions Canada and there was something else with Health. So we plastered the Province of Quebec with government ads that were legitimate government programs.

What was the strategy? The media was not available to anybody else but us. We had it blocked, okay? Why did we do that? So that the separatist movement . . . wouldn't have access to it.

On the absence of documents on file

Mr. Guite: You have to remember -- and again I'll use the terminology -- when you're at war you drop the book and the rules and you don't give your plan to the opposition. You don't leave your plan of attack on your desk.