Responding to a report he helped a loyal Liberal Party member tap $50,000 in funding for a music festival, Environment Minister David Anderson says he did nothing wrong by alerting a constituent to available federal funding.

"It's absolutely the job of a constituency office to inform constituents, and indeed anyone who phones about government programs," Anderson told reporters in a scrum outside the cabinet meeting Tuesday.

"So it's entirely appropriate for my office to provide information about a government program, in this case the sponsorship program, for a particular arts group that was having a festival."

According to a report in The Toronto Star, the environment minister's staff helped a music festival secure the funding from the scandal-ridden federal sponsorship program singled out in the recent Auditor General's report.

In the report from Ottawa, the newspaper said long-standing federal Liberal Party member Jamie Kelley approached Anderson's constituency office in 2001 for help with the event.

The office was eager to help, he said.

"They told me of a secret slush fund where they could access money for constituency programs. There was no application form, no process other than to write a letter (to Public Works)."

After writing a four-page letter and following up with phone calls to the Minister's office, he was assured Anderson had personally taken his file to then public works minister Alfonso Gagliano.

According to Kelley, he can't recall ever being contacted by a public servant following up on his application, or to ask for details about the festival.

The next formal notice he received was from Media/I.D.A. Vision, a Montreal advertising agency named in the Auditor General's report as one of the advertising firms that transferred sponsorship funds to five Crown corporations.

Kelley said he was told he would be getting $50,000 in two installments and shouldn't worry about paying a commission as that was being taken care off by Public Works Canada.

Scrumming with reporters in Ottawa Tuesday, Anderson insisted there was no wrongdoing in the case.

"There is no question of a slush fund. You know and I know and every other one of these journalists here knows that there was a ... sponsorship program which anyone in Canada was able to apply for," he said.

"People in my office did what is their job to do, and which you people would probably think they should be fired if they didn't do," Anderson added.

"Which is to inform the public about a public government program, to which they were entitled to make an application to."

Liberals rally round Anderson

In the House of Commons daily question period, Public Works Minister Stephen Owen took up the government's defence of the festival funding.

"I've seen the application. It was four pages in detail, fifteen pages of endorsement letters... from people in the community," Owen told the House.

"A post-mortem of the festival found it to be entirely successful, Mr. Speaker. This was an appropriate expenditure of public funds in the community."

But despite the government's insistence due process was followed, the opposition seized on the report -- citing it as evidence Anderson should be stripped of his cabinet portfolio.

"The Prime Minister stood in this House and personally vouched for every single member of his cabinet. He said, 'I asked the question did they know of any wrongdoing in the sponsorship program and the answer was no'."

Conservative Party leader Grant Hill shot at the prime minister. "Has the prime minister sought the disappearance of this environment minister?"

Hill was joined by a chorus of opposition MPs focused on whether Anderson would be disciplined for his part in the reported incident -- so focused, in fact, that they found no time to quiz the prime minister on the announcement that three Crown corporation presidents have been suspended.

Not missing a beat, Martin dismissed the insistent resignation demands as "absolute nonsense."

"The fact of the matter is every member in this House knew of the sponsorship program -- they applied for it. The problem I've said was those who knew of wrongdoing at the time it took place," Martin replied.

"The minister did not know of wrongdoing. The members of this cabinet did not know of wrongdoing at that time."