$161-million CSL 'error' puts Martin on hot seat
By CAMPBELL CLARK
>From Thursday's Globe and Mail
POSTED AT 5:13 AM EST
Thursday, Jan. 29, 2004
Ottawa — Prime Minister Paul Martin's shipping empire had business dealings
with Ottawa that were a thousand times more vast than the Liberal government
previously admitted, totalling $161-million over the past 11 years, newly
released records show.
Although the government reported to Parliament a year ago that companies Mr.
Martin owned did only $137,000 worth of federal business in the past decade,
they admitted yesterday that the real amount was far more, including
$46-million in contracts issued when Mr. Martin was finance minister.
The huge disparity prompted opposition politicians to raise suspicions of a
cover-up. But Mr. Martin insisted that it was a mistake -- one minister said
it was due to "administrative errors" -- and that he was unaware of it for
months.
He said he was "appalled" when he heard of it, and demanded it be corrected.
"I was not in government at the time that question was answered, and in fact
did not really know about the answer until later, when further facts came
out," he said at a press conference. "As soon as I saw that, I said I want a
complete examination of all of this."
But the major business links between his family's companies -- Canada
Steamship Lines, related companies, and subsidiaries -- also renewed
questions about potential conflicts of interest now that he is Prime
Minister.
Conservative MP James Rajotte said he is skeptical of the government's
assertion that the false information that it originally provided was a
simple mistake.
"It makes me suspicious," he said. "It's a very big administrative error, if
it is an administrative error."
He said it is in the Liberal government's interest to minimize the extent to
which Mr. Martin's family businesses earn their income from government
contracts, because that heightens concern about possible conflicts of
interest.
"The questions become a lot more serious when you have [millions] in
contracts," he said.
He said Mr. Martin should have sold his interest in CSL before joining the
cabinet in 1993, and he called for an independent review of CSL's government
business.
However, Mr. Martin, who last year transferred to his sons control of CSL
Group Inc., parent of Canada Steamship Lines and several other subsidiaries,
suggested such a review is not necessary now that more information is out.
"Lookit, I'm out of the company. But as far as I'm concerned, my dealings
are an open book. That document is without a doubt the best document in
terms of that involvement that could be created," he said.
Over all, 12 companies in which Mr. Martin had a stake won 548 contracts for
shipbuilding, ship repair, engineering and project management. The
$161-million total over 11 years includes $10.3-million in grants and a
$4.9-million government loan.
Mr. Martin noted his family's shipping firm, CSL Group Inc., and its
subsidiaries have been doing business with Ottawa for decades.
But the figures suggest Mr. Martin's companies did less business with the
government, not more, while he was finance minister.
CSL and its subsidiaries won $82.4-million in contracts in the first 10
months of 1993, while the Tories were in power -- mostly from one
$69-million deal to build two destroyers -- and $33-million in the 15 months
after he left Jean Chrétien's cabinet, when he was a backbench MP.
That compares to $46-million in the nine years he was finance minister.
Mr. Rajotte originally posed a written question to the government about
dealings between Mr. Martin's companies and the government in late 2002,
placing the query on the Commons order paper.
In February of 2003, the Chrétien government replied that Mr. Martin's
business interests received $137,000 in contracts or grants.
Last October, the Canadian Alliance found evidence of $15-million in
contracts on government websites. Don Boudria, the government House leader
under Mr. Chrétien, promised to provide a corrected answer. His successor,
Jacques Saada, released that answer yesterday.
Mr. Saada chalked up the mistake to "administrative errors." Government
insiders said that among other mistakes, officials in most departments
thought the Public Works Department, which issues most contracts on behalf
of government departments, would answer for them.
Of the contracts and grants issued while Mr. Martin was finance minister,
$18.6-million went to Lansdowne Technologies, which specializes in managing
technical projects for government agencies.
Canadian Shipbuilding and Engineering sold its stake in Lansdowne to company
management last December, after the Alliance raised questions about the fact
that the firm was not listed on Mr. Martin's declaration of his holdings.
CS&E president Alan Thoms said his firm decided a few years ago that the
company was not part of its core activities and has been diminishing its
stake.
He said that CS&E, which won $20-million in ship repair deals from the
government while Mr. Martin was in cabinet, never received any benefit
because Mr. Martin was finance minister. "It was a disadvantage," he said.
© 2004 Bell Globemedia Publishing Inc.
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