Prime Minister Stephen Harper on Sunday set a byelection date of May 13 for the riding of Labrador, where Penashue is hoping to regain the seat he resigned just weeks ago amid an Elections Canada investigation into his 2011 campaign.
Crosbie, a senior cabinet minister in the Joe Clark and Brian Mulroney governments, said the PMO now has much more control over what cabinet ministers are allowed to say in public than his time in government.
"I would say that these were matters that were being decided by the prime minister and his immediate advisors, and they believed I assume that it was better for Mr. Penashue to be quiet and let others defend him," Crosbie told CBC News in an interview.
During the months before his resignation, Penashue said little directly about allegations over overspending on his campaign, with others rising in the Commons and elsewhere to defend Penashue.
Crosbie said the issue of the power of the PMO goes beyond Ottawa to other Commonwealth jurisdictions, including the provinces.
"[Harper] didn't only control Peter Penashue, he controls all the members of his cabinet. That's obvious, and so does the British prime minister."
"I think the major problem with parliamentary democracy … is the overwhelming power and influence of the first ministers," he said.
"In our system, we have a problem that first ministers now are too predominant, and the members of their cabinet … have less and less influence."
Crosbie said he still supports Penashue, a former Innu Nation leader who scored an upset victory in the May 2011 election when he defeated Liberal incumbent Todd Russell by 79 votes.
"Mr. Penashue, I think, is a good representative," said Crosbie, adding that he has known Penashue for years, and counters criticism that Penashue was not influential as intergovernmental affairs minister and MP.
"Mr. Penashue is a man, my own view and opinion is, [who] should be given another chance."
'A tough struggle'
Crosbie, meanwhile, admits that Penashue will have a challenge in winning the race in Labrador, which only twice in its history has voted for non-Liberal candidates.
"It's going to be a tough struggle, I imagine. His Liberal opponent is a fine woman," said Crosbie, referring to Yvonne Jones, who is resigning her southern Labrador seat of Cartwright-L'Anse au Clair to run federally. The NDP have nominated Harry Borlase, a researcher on northern science.
"That's going to be a very interesting contest to watch, but I don't think it's by no means certain who will win it."
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