Martin says he was out of loop on sponsorship

CTV.ca News

Testifying at the Gomery inquiry Thursday, Prime Minister Paul Martin said he played "no role" in the administration of the sponsorship program when he was federal finance minister.

Following the close call of the Quebec referendum in 1995, Ottawa set up a secret $50 million unity fund. While he knew about the unity fund, its administration was turned over to the office of then-prime minister Jean Chretien and the Privy Council.

Earlier this week, Chretien testified and said Martin had signed off each year on $50 million in funding to promote national unity.

Martin acknowledged that he set budgets, but said that's where his job ended.

Martin told Finkelstein he said he didn't even know there was a formal sponsorship program until about 2001, when stories started to appear in the media.

He said his main focus as finance minister in the mid-1990s was the Canadian deficit.

"They were calling us a banana republic," he told the inquiry Thursday.

"We were getting quite worried that our interest rates would get out of control because we would have trouble borrowing on foreign markets," he said.

No knowledge of ad contracts

Martin also said he was not involved with the ad agencies that received the funds from the sponsorship program.

When asked, Martin said he never discussed sponsorships with Jean Pelletier, Chretien's former chief of staff.

The answer was the same when questioned on his dealings with Jean Carle, a senior aide to Chretien during his tenure as prime minister. Carle recently told the inquiry he helped create a phony paper trail for a deal.

"I really had virtually nothing to do with Jean Carle," Martin responded. Martin was asked why he was not involved in the formulation of the Quebec referendum strategy, despite his senior post at the time.

"I wasn't asked, and second of all, that I would not have been asked I think is reasonable given the fact that it was felt I would be more valuable as a foot soldier," he said.

Martin told the inquiry he attended only 17 of more than 200 Treasury Board meetings, where many of the government's spending decisions are finalized after they are approved by cabinet.

He said the convention of the finance minister is not to attend Treasury Board meetings.

"You go where you are most needed," he said.

As finance minister, Martin was also second-in-command at the Treasury Board.

Support for inquiry

Martin's appearance comes almost one year after Auditor General Sheila Fraser's devastating report was tabled in Parliament.

Fraser found that about $100 million ended up being paid to Liberal ad firms for work of little or no value.

In addition, she said some transactions appear to be designed to funnel fees to agencies while hiding the source of the money.

The inquiry headed by Justice John Gomery is mandated to find out why the $250-million program was so badly managed and to determine ways to prevent such misconduct in the future.

In a closing statement Thursday, Martin said: "Very briefly Mr. Finkelstein, I'd simply like to say that I believe that government must take its responsibilities very seriously. I think that integrity and character in the administration of government is absolutely essential. Without it, nothing can be done. The great consensus behind what governments want to do will never arrive. I called this commission because of that and I think that Canadians expect no less of us and we look forward to your report commissioner."

With a report from CTV's Rosemary Thompson and files from The Canadian Press