Corruption in Government
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The Empire Club of Canada Addresses (Toronto, Canada), 17 Nov 1994, p. 87-100


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Cameron, Stevie, Speaker
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The Mulroney government as an aberration: a government that surpassed all others in terms of the number of politicians, political aides, organisers and fund-raisers under police investigation. Many were charged; many were convicted. The speaker goes onto describe the Mulroney government as depicted in her book. Attempts at defending the former Prime Minister by one or two Mulroney Tories. The speaker's response to those criticisms. Who would and who would not go on the record for the book. How could what happened happen? An attempt to answer that question. Laying blame. Does such corruption matter, and the speaker's response to that question. Examples of what such corruption costs us. The legacy of the Mulroney years. Some heroes. A happy ending.
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17 Nov 1994
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English
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The speeches are free of charge but please note that the Empire Club of Canada retains copyright. Neither the speeches themselves nor any part of their content may be used for any purpose other than personal interest or research without the explicit permission of the Empire Club of Canada.
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Full Text
Stevie Cameron, Journalist and Author
CORRUPTION IN GOVERNMENT
Chairman: John A. Campion, President, The Empire Club of Canada

Head Table Guests

Carlyle Dunbar, Financial Journalist and Honorary Director, The Empire Club of Canada; Katie Flynn, grade 13 student, Jarvis Collegiate Institute and Editor-in-Chief, Jarvis Jargon; Andrew Phillips, Senior Editor, Maclean's Magazine; Phyllis Bruce, Publisher, Phyllis Bruce Books; Keith Morrison, Co-Host Canada AM; Sarah Band, Past President, The Empire Club of Canada; Sylvia Stead, National Editor, The Globe and Mail; John Macfarlane, Editor, Toronto Life and Partner, Macfarlane Walter & Ross; Larry Stout, Broadcaster and a Director, The Empire Club of Canada; Patricia Best, Author and Journalist; The Rev. Cameron Brett, Minister, St. Andrew's Presbyterian Church; Nancy Gall, Managing Editor, The Financial Post Magazine; Richard Gwyn, Columnist, The Toronto Star; and Jan Walter, President, Macfarlane Walter & Ross.

Introduction by John Campion John Winthrop's Sermon

In 1630, in a sermon aboard the Arabella, sailing for the New World, Puritan lawyer John Winthrop took a text from The New Testament, Matthew 5, verse 14:

"A city that is set on a hill cannot be hid..."

All of these factors can strike at the perception of faithfulness of a leader. No politician can escape the analysis. Few governments remain totally unscathed.

The criticism of public figures raises issues concerning the requirements that fall on journalists and authors who write about politics. These demands, too, are beset with high, conflicting and sometimes impossible demands:

• the difficulties of writing without full access to information;
• the sometimes impervious nature of modern political and bureaucratic systems;
• the tender divide between policy and personality;
• the obscurity wrought by the development of public opinion by governments and others;
• the need for a sophisticated, mature and insightful mind and clarity of writing in the journalist;
• the need for compelling titles and headlines to attract attention in a competitive media and book world;
• the trade-offs between balance and partisanship; and
• the tensions involved in writing a story where truth is subjective and trial court level proof entirely impossible.

The faithfulness about which John Winthrop wrote is essential for public figures--including journalists. Our democracy depends on it.

Stevie Cameron is the author of a book alleging scandal during the Mulroney era in politics. She is a highly respected journalist and author. She is a contributing editor to Maclean's Magazine, a columnist in Equity Magazine, a frequent commentator on Morningside, CBC commentary, As It Happens, CBC morning radio shows and other television and radio programmes. She has been a weekly political columnist with the Globe and Mail, a contributing editor to Saturday Night, contributor to the Financial Post Magazine, Chatelaine, Toronto Life and other magazines.

She was a host of CBC's Fifth Estate and a reporter for The Ottawa Citizen, The Ottawa Journal and The Toronto Star. She is the author of other books, including Ottawa Inside-Out and this fall has published her book on the Mulroney era in politics.

This work touches on the dark side of politics. By doing so, Stevie Cameron raises issues about faithfulness in politics, its reality and its illusion and the pressures and limits on journalists and authors in writing about such controversial topics.

From this text, there is chiselled in stone in the Boston Common, the following phrase:

"For we must consider we shall be a city upon a hill. The eyes of all people are upon us so that if we shall deal falsely ... we shall be made a story and a byword through the world."

Winthrop, elected annually to the governorship 12 straight times in a row, also began to articulate the need to establish individual liberty to maintain civil order, a concept that helped form the basis of the early American legal system and affects both the American and Canadian constitutional law through The Charter of Rights and Freedoms.

At the conclusion of a lawsuit brought against him as governor, Winthrop gave a speech on the authority of magistrates and the mission of government officials. He said, in part:

"We account him a good servant who breaks not his covenant... When you call one to be a magistrate, he does not profess nor undertake to have sufficient skill for the office nor can you furnish him with the gifts, therefore you must run the hazard of his skill and ability. But if he fails in faithfulness which by his oath he is bound unto, then he must answer for it."

Prime Ministers in Canada face Herculean demands:

• the need for practical compromises in a country of competing provincial and group interests;
• the requirement of a political party system in a large and diverse land;
• defining the acceptable limits of patronage in a society where affirmative action and political systems require that governors can know and trust the political support of appointed officials in important posts so as to govern effectively;
• the acceptable interface between business and government in a large land with a small capital base;
• the overexposure of personal foibles in a television age;
• the demands and accusations of an opposition system, followed by the compromises of finding practical solutions in government;
• the shifting needs of a society in a rapidly changing, interdependent world; and finally
• the actions of individual ministers who themselves are accountable to Parliament but who necessarily reflect upon the leader of the government.

Stevie Cameron

Thank you very much, John, and thank you to everybody who came. I've been expecting to be hit with some buns, and not one has hit me so far. I started to feel at home when I walked in, because I heard The Road to the Isles on the piano. My grandfather, who was a very right-wing Conservative Tory mayor of Belleville, used to pipe us every Sunday morning to St. Andrew's Presbyterian Church in Belleville by playing The Road to the Isles. The grandchildren knew it was time to run down the stairs and get ready to go to church. No one in Canada was brought up in a more right-wing, staunch, Conservative family than I was. And so I thought: "This feels like home in here."

I also thank The Empire Club for its sense of humour. The last time I was at the head table, I was invited to sit beside Bill Gardiner, who was the guest speaker. They thought that it would be fun to put us together and it was. We actually had a very good time.

I would also like, before I start today, to tell you that one of the guests here in a sense got me started on this path. It was Keith Morrison, who many years ago gave me one of the best stories I have ever had. He and his wife Suzanne, who are very good friends and neighbours of mine in Ottawa were over for supper the night before they moved to Los Angeles. Keith told me that he had been in the parliamentary dining-room that day and had seen a man called Rick Logan in the parliamentary dining-room. Rick Logan was an aide to Bob Coates, the Defence Minister. He said, "Rick told me with great merriment today about a wonderful thing he is doing. He is applying for $20 million in DREE grants to start a clam fishery in Nova Scotia." Keith and I cracked up; we laughed and laughed. And that was the clam scam that turned out to be my first big hit for The Ottawa Citizen and Keith went off to Los Angeles after telling me the story. So it's all thanks to you, Keith.

Since last Saturday night, I have been on this book tour, as many of you know. I was in Vancouver for a few days. On Saturday night I had dinner with my uncle. He is 86 years old, a distinguished former soldier, a former Conservative Party MP from Vancouver, a former president of the British Columbia Tories. He is the man who coaxed me into having a coffee party, when I was at UBC, for his friend Howard Green, who was then the Minister of External Affairs and running in my riding. He is also the man who convinced me to join the Young Progressive Conservatives at UBC, which I did. So we go back 34 years in party politics in British Columbia.

When we were having dinner he said to me, "Was the Mulroney government an aberration? Stevie, was it always like this?" And he said, "Is this just business as usual, or were these people unusual? Was this an aberration?" And I said, "I believe it was an aberration." And I said that every government has its crooked politicians, its patronage and its rigged bids, but there was never a government in Canadian history like this one. It was an example of a small coterie of people who hijacked the Conservative Party. I haven't been able, of course, to belong to any party during my many years as a journalist, but I said to him, "You know, many of the cabinet ministers in this government were as honest as anyone I know, and many of the MPs were. There are plenty of honest Tories and the Party will come back. But the people who were honest during those years were powerless."

There wasn't any government that ever had as many politicians, political aides, organisers or fund-raisers under police investigation. Many of these people were charged and many of them were convicted. A significant number of those people under investigation were in the Prime Minister's closest circle.

There was no prime minister in the history of this country who ever rewarded his closest cronies and bagmen with as many contracts, honours and appointments.

There was no prime minister in the history of this country ever before who filled so many senior diplomatic jobs with his best friends. No other prime minister in the history of this country has told Canadians to tighten their belts and then flaunted an extraordinary jet-setting lifestyle.

And so many things have happened since my book went to print. I was frustrated this fall. The book went to print in early September, and within days of that, one of the Prime Minister's closest friends was charged with income tax invasion and several more crashed into bankruptcy. One of those who did is now under investigation for his misuse of trust funds.

No other prime minister has ever terrorised the press or the public service the way this one did and no other prime minister ever brought Washington-style lobbying to Canada, forcing hundreds of businesses to retain firms who offered them little more for their huge retainers than an old-fashioned protection racket.

So I told my Uncle Ces, "Yes, this was an aberration. No, this is not your party. This is not the party I once belonged to. These were a bunch of bozos who took us for a nine-year ride."

A lot of the Mulroney Tories--well there haven't been very many of them, perhaps one or two--have tried to defend the former Prime Minster and his gang. They've said the book was dependent on anonymous sources. These people are ignoring the names of the on-the-record Conservatives who helped me--people like former Deputy Prime Minister, Erik Nielsen. He told me that he had been so disgusted with the corruption in the government, and so disheartened by Mr. Mulroney's failure to clean it up, that he resigned two years after the government came to power. And he said to me, "You know, I'd love to run for the leadership myself at some point, but I have a sex scandal in my own history and I knew that that would prevent me from ever running for politics, or running for the leadership," and then he said, "I also don't excuse the fact that I took a patronage appointment when I quit." He said, "My pension was small, I needed the money and I wanted to do the job." He eventually became, as you know, the head of the National Transportation Agency. He said, "I couldn't work with this government after 1986. The worst thing that ever happened to me was having to stand up in the House of Commons, while the Prime Minister was in Asia day after day after day, to try to defend Sinclair Stevens. "That ruined my political career and it ruined my faith in my party."

The Tories who say I'm depending on anonymous sources are ignoring the on-the-record help I had from Rod Stanler, a former Assistant Commissioner of the RCMP, who told me on-the-record that he left the force after 33 years of a very distinguished career, when he found it was impossible to investigate crooked politicians because of political interference. They are ignoring the comments from some of Mulroney's closest friends and allies who agreed to see me. These are people like Senate speaker Guy Charbonneau, in my mind the most powerful man in Ottawa during those years, who admitted to me that he did make calls to public servants on contracts and on this lease and that contract and basically that he saw nothing wrong with it They're ignoring the fact that David Angus also spoke to me. David Angus was the Chairman of the PC Canada Fund and he admitted that he had given the Mulroneys expense cheques every month. This was after years and years of denying that the Party assisted the Prime Minister with a supplementary income. There was also Robert Foster, a businessman here in Toronto, whom many of you know well. He replaced David Angus as the party fund-raiser. He was stunned when I showed him a cheque I had from a secret PC Canada Fund in Montreal which was used to pay Mulroney expenses. According to Robert, the Party was only supposed to have one bank account. There was Toronto advertising executive, Tom Scott, another person who agreed to speak on-the-record and very frankly, as frankly as Erik Nielsen had. He designed the Tory ad campaign in '88 and the unfortunate campaign of 1993 (which none of you will forget). He told me on-the-record how he paid one of Mr. Mulroney's closest friends, Michel Cogger, $4000 a month for years and years, just to be his eyes and ears in Montreal. In those days, as he would say himself, it was good business to keep the Prime Minister's pals on the payroll.

A lot of other people agreed to be on-the-record for this book. They include the hoods, mobsters, hit men and fraud artists who provided the brass-knuckle enforcement that was needed, in many cases, to keep people in line. And even an RCMP informer, Mike Mitton, a Montrealer who is now in Vancouver, and who worked as an undercover sting for the Mounties in the mid-eighties to trap crooked politicians, agreed to go on-the-record. Today, his life is in danger. As many of you know, Mulroney's chef, who provided an inside glimpse of life at 24 Sussex, is on-the-record. He tried to write a book himself about this. He had a lot of trouble--well, he couldn't get a publisher and so a few years ago, when I was hosting a Fifth Estate, the first story I did for the Fifth was a piece on James Cross--the man who was abducted by the FLQ, the British diplomat--and one of the people we interviewed was one of his kidnappers. This man is now a very respectable publisher in Montreal. I asked him if he had seen the chef's manuscript and he said, "Yes, I have seen it." And I said, "What did you think?" And he said, "It's good, it's good, I'd love to publish it." And I said, "Why did you turn him down?" And he said, "Because I'd lose my Canada Council Grant." And I love the idea of the terrorist being afraid that the government would suspend his grant.

As I go around Canada now, the questions that I get from people are the same everywhere. How could this have happened? Where were the Opposition? Where were the press? Where were the police? And why didn't anyone do anything?

Well, as I said earlier, it happened because the Party was hijacked by a small group of people determined to cash in on their turn in power. They'd been frustrated by Joe Clark's failure to make the appointments and give the contracts that they expected in 1979, and this time, they weren't going to take any chances.

There were lots of people in the Conservative Party who objected. Nielsen did. David Kilgour, the MP from Edmonton, was frozen out and eventually crossed the floor of the House. Suzanne Blais-Grenier objected and we all know what happened to her. She was the Minister of the Environment who said that there should be a royal commission to investigate a kick-back ring that she knew existed in the Party. She said she would give her sources only to a formal royal commission. She was crucified for her statements and thrown out of the Party.

The Opposition have to take some of the blame for this. They knew exactly what was going on, because so many whistle-blowers approached them. They called with information and documents. The Opposition MPs would often pass them on to me and I would say, "Look, why don't you raise it in the House?" Well they said, "Our leaders are very reluctant to raise these issues in Parliament." They believed, to a person, that there wasn't any political advantage for them in raising scandals in the House because scandals make all politicians look bad, not just the Tories. Audrey McLaughlin, John Turner and John Chretien didn't like it when their own MPs pressed them to raise these scandals in the House.

And yet the police knew what was going on. But there was so much political interference in their investigations that they were almost powerless.

Okay, so what about the press? Why weren't the press more vigorous? Well, TV and radio reporters believed that these stories are far too complicated for them. Broadcasters have to be very short and fast. In TV, you have to have pictures. One of the reasons I was hired at the Fifth Estate was to do exactly this kind of story, but when I was the host there I finally was told, "Your kinds of stories don't make good television. With you, we are always filming guilty buildings and bits of paper."

So broadcasters all left it to print journalists. The only print journalist, who could do these stories were people who were working for the big outfits like the Globe or Maclean's or Toronto Star, or Southern News, because they're among the few publications in this country willing and able to pay the high cost for libel lawyers. And even these publications grew very weary of Tory scandals. I remember the reaction of people at the Globe and Mail--"Not another crooked Tory, Stevie?" The only person who never said that to me was Sylvia Stead, my editor at the Globe, who's here today. When reporters did get these stories out, the price that we paid was horrendous. The barrage of hostile and abusive letters which would come to our editors, and the phone calls from senior people in the Prime Minister's office, and from cabinet ministers were exasperating. The producers on television and radio got the same treatment. I had several friends in the press gallery in Ottawa who were fired because of their stories. I have several friends whose spouses were fired. I have other friends whose spouses were hired, which was just as effective a way of keeping people quiet.

As an aside here, it's really important for Canadians because most Canadians don't understand this--we have a completely different legal system here in Canada than they do in the United States. In the United States, reporters can report what they believe to be true. Here, it is up to the reporter to be able to prove everything will be right. So we can only print what we can prove to be true. That's why for me the biggest challenge I had in doing this book was the documentation, which had to be given to Peter Jacobsen, the libel lawyer that was helping us. The most important investment I made was a $15.95 threehole punch from Grand & Toy. I knew that Peter and Jan Walter and John would demand proof all the way through for everything I was saying, so I had to document it very carefully and cross-reference it.

I started with this. This is my mother binder. By the end of the year and a half I had 30 of these, plus 20 banker's boxes of documents. But the documentation I needed to give Peter are in these binders. And I have shoe boxes full of tape recordings. They're under beds in my neighbours' houses. But this binder, which I picked up by chance, is my first Crooks and Scandals binder. I've got four Crooks and Scandals binders, two Cronies binders, two Lifestyles binders, one Sting binder and so it goes. This one is A to B, airport, airbus, and bases rackets, military.

Another question I get is a very cynical one: What does it matter? Everybody indulges in corruption, I'm told. If it's true that everybody does it, is that an excuse to allow it to continue? Citizens in countries all over the world have decided that they have had enough. We've seen massive changes in countries like Australia, Hong Kong, Britain, Italy and France, where citizens are trying to fight corruption at the highest levels of government. I would say that the most dramatic changes have taken place in Italy, where a group of magistrates, who are independent and duty-bound to investigate and prosecute, have risked their own lives, and many of them have been killed, to bring a whole political class to heel. I think that here in Canada we have buried our heads in the sand, and have refused to realise that we too were being run like Italy was. And I think that the other thing we have failed to realise when we are cynical about corruption is that it doesn't make business sense to run a corrupt government. One of the reasons that Hong Kong has decided to reform her government and make sure that it is a clean government is that companies and countries don't want to invest in communities where the politicians are crooked. I've spoken to business people, a very good example of which is Sid McMurray, who was a developer in Ottawa. He lost his office building there under power of sale because another developer got the lease for the property. He properly should have won that. Under the bidding he lost it. He's on-the-record about this. Some of you will know him. There are many other developers who are losing buildings and seeing massive moves out of their buildings and into buildings owned by people who've paid enough money to the Tories to get those leases. It doesn't make any business sense. You know the tax payers are paying a fortune for these crooked deals. We can't afford these crooked governments.

I've got a couple of other examples that this audience might appreciate. The Export Development Corporation was solicited by Guy Charbonneau, the Speaker of the Senate. He admitted to me on-the-record that he encouraged the Export Development Corporation to give tens of millions of dollars in grants and loans to a company in Quebec to do work in Gabon. Why Gabon? It is the wealthiest country in Africa. It isn't eligible for CETA aid. The president of the country is a corrupt despot who sends his fleets of Mercedes Benzes to Switzerland every six months for their tune-ups. Mr. Mulroney made a special stop-over in Gabon, which no one could understand, to announce the latest bank-rolling with Canadian money. How does that make sense for us as taxpayers? How does it make sense for Mr. Mulroney and John Bosley personally to lobby Canadian bankers at international banks to give tens of millions of dollars in loans to a Toronto construction magnate for a hotel project in Hungary? Mr. Bosley did not disclose that he was an officer of the company that was going to be building the hotel. He was an MP. Mr. Mulroney did not disclose that this same construction magnate here in Toronto had been very generous with both himself and his wife. He personally threatened Don McCutchan, the Canadian member at the European Bank for reconstruction and development. (Many of you know Don. He is now working for the Reichmanns here in Toronto.) He personally threatened Don with the loss of his job if he didn't help to get the loans. Mr. Frank Potter, who was at the Royal Bank for Canada, lost his job. Don McCutchan lost his job. It cost us $700,000 to settle their dismissals. Don McCutchan formally lost his job because he blew the whistle on the President of the EBRD, Jacques Attali. Mt. Attali was a very close friend of Mr. Mulroney. Mr. Mulroney arranged for him to fly in and out of Canada several times on Challenger jets. He took Mr. Attali's advice and fired Don McCutchan. So how does this make good business sense? It doesn't make any sense.

And I think that this is a long miserable story. The legacy of the Mulroney years is that Canadians have lost their faith in government, and they've lost their trust in politicians. Politicians everywhere are paying for what those bozos did.

But there are some heroes in all of this. I'll just mention a few of them. Don McCutchan is a hero. The chef who hasn't been able to get a job since he quit in disgust in 1989 is a hero. Sylvia Stead is a hero--she ran my stories. Suzanne Blais-Grenier. Lyn Coulter, the gutsy little Justice of the Peace in Ottawa who allowed another hero, Glen Kealey, to lay charges against 13 of these people, including Mr. Charbonneau. Peter Pearson, a name out of the past, for many of you. He tried to stand up to John Sirois, the Chairman of Telefilm. Peter Pearson, the film maker, had a hell of a time with the new Chairman of Telefilm Canada. His story is extraordinary. Mike Mitton, the little fraud artist from Montreal, who worked in the heart of an organised crime gang in Montreal for two years to try to help the police bring down a group of corrupt Tories. The police organisation was cut off right in the middle. Jan Walter is a hero. She published my book. John Macfarlane. My husband is a hero because he paid for my phone bills. Is there a happy ending to all this? I know there is. We all know there is. A year ago, the voters of Canada gave us a happy ending and punished these people who did so much harm to our country.

Thank you very much.

The appreciation of the meeting was expressed by Sarah Band, Past President, The Empire Club of Canada.

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Corruption in Government


The Mulroney government as an aberration: a government that surpassed all others in terms of the number of politicians, political aides, organisers and fund-raisers under police investigation. Many were charged; many were convicted. The speaker goes onto describe the Mulroney government as depicted in her book. Attempts at defending the former Prime Minister by one or two Mulroney Tories. The speaker's response to those criticisms. Who would and who would not go on the record for the book. How could what happened happen? An attempt to answer that question. Laying blame. Does such corruption matter, and the speaker's response to that question. Examples of what such corruption costs us. The legacy of the Mulroney years. Some heroes. A happy ending.