Cover Story

PMO kept tabs on swim meet

by Jason Magder, The Suburban Wednesday, June 15, 2005

Montreal, Que-- Prime Minister Paul Martin's staff was briefed on the financial situation of Montreal 2005, the organizing committee for the World Aquatics championships, The Suburban has learned through an access to information request.

A March 8, 2004 letter sent by Montreal 2005's then director general Yvon Desrochers to Heritage Canada executive director Marc Lemay claims a senior councillor in the Prime Minister's Office was informed on Feb. 23 by a high-level bureaucrat at Heritage Canada that "the financial audit of Montreal 2005 went badly."

Desrochers's letter states that the audit in question was only scheduled for Feb. 26, three days after the supposed PMO briefing. In fact, an audit was done on March 4 after being delayed three times by Heritage Canada, according to that and other letters from Desrochers. The audit was carried out after the organizing committee asked for an additional $6.5 million from the federal and provincial governments to fund the world championships.

While Heritage Canada denied the PMO was briefed about the audit in a March 26, 2004 letter, Desrochers wrote a subsequent letter dated April 19, reaffirming his accusation:

"You could always put into question the credibility of the Prime Minister's Councillor...I don't."

The supposed briefing occurred when $263,000 of federal money owed to the organizing committee was frozen by Heritage Canada. The organizing committee apparently needed that money to pay its employees and without it risked being shut down.

Although the letter doesn't identify the senior PMO councillor, Desrochers was a former employee of Francis Fox, president of the Montreal 2005 organizing committee prior to being hired as Martin's chief of staff in Nov. 2003.

"I don't want Montreal 2005 to again be found in the perilous situation of not being able to pay its employees and forced to abdicate before blackmail and threats," the letter states. "It's sure that I won't refinance my personal resources to the organizational committee as I have had to do in the seven months since I arrived at Montreal 2005."

Desrochers committed suicide on Feb. 2 after the event had been initially cancelled by FINA, the world aquatics body. FINA reinstated Montreal as the host city in mid-February after Montreal Mayor Gérald Tremblay committed to opening the championships on schedule July 16-31 with a financial guarantee from the city to pick up any deficit.

Marc Roy, a spokesman for the Prime Minister's Office, said the claim that the PMO received a briefing is not reliable.

"That assessment comes from a third party that is not even within government, saying that the prime minister received a briefing on a specific issue, I don't think that holds all that much merit," Roy said. "The Prime Minister is not involved in micro-management of specific file issues, that's what ministers are for. I won't comment on what briefing the Prime Minister gets or doesn't get, but when it comes to decision-making of specific files like funding, that's done by the departments that do such work."

A spokesman for Heritage Canada outright denied that the PMO was briefed.

The audit in question gave a favourable assessment of Montreal 2005 but was concerned that the group did not have a policy for conflicts of interest. A 2003 feasibility study also raised questions about the organizing committee, calling it a major handicap and saying that it was too small and did not have the experience necessary to hold such an event.

Desrochers, Fox, Roger Legaré, Marc Campagna, Jean Lafleur, André Ouellet and Serge Savard were all members of the group's board of directors or of Internationaux de Sport de Montréal, Montreal 2005's parent group.

Montreal 2005's board of directors resigned en masse in February, at which point Montreal Mayor Gérald Tremblay and Grand Prix boss Normand Legault took over as co-presidents of the event.

During 2003 and 2004, there were several letters from Desrochers, asking, and then demanding that the federal government free up $263,000.

The federal government increased its contribution from $10 million to $16 million after the 2003 feasibility study, but did not ask the organizing committee be redrawn. Instead it froze $263,000 until March, 2004 when the audit was released.

"It was frozen because we had some concerns about the organizing committee," the Heritage spokesman said.

The provincial government upped its contribution to $19 million.

Despite the access to information request, much of the group's financial statements remain hidden from the media, including expense reports and many minutes of meetings held by the organizing committee.

Among the information shrouded in secrecy is Desrochers's salary. Desrochers was reportedly paid an annual salary of $185,000 plus a 15-percent commission on all sponsorships.

Montreal 2005's new board mandated new director general René Guimond in March to investigate Desrochers's salary and commission. Guimond was also asked to investigate any sums paid by the organization to Productions Nadis and a numbered company, both owned by Desrochers, but lawyers for the family of Yvon Desrochers obtained a gag order prohibiting public release of that information.

Desrochers was named in the Gomery inquiry during Groupaction president Jean Brault's testimony about the federal sponsorship scandal.

When asked if there was political interference in the way sponsorships were awarded, Brault said Desrochers, a former assistant to Fox, pushed hard for $840,000 to renovate the Corona Theatre in Lucienne Robillard's St. Henri/Westmount riding and another $300,000 to fund a study about French-speakers outside Quebec.

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