06/21/2011 02:30 EDT | Updated 08/21/2011 05:12 EDT

RCMP To Investigate Harper Government On G8 Funding


THE CANADIAN PRESS -- OTTAWA - OTTAWA - The RCMP is looking into allegations that the Harper government misappropriated funds in order to lavish $50 million on a cabinet minister's riding prior to last year's G8 summit.

The probe comes on the heels of an auditor general's report earlier this month, which concluded the government "did not clearly or transparently" explain how the money was going to be spent when it sought Parliament's approval for a G8 legacy fund for Tony Clement's riding.

The Mounties' involvement was prompted by a complaint from former Liberal MP Marlene Jennings. She was interviewed for an hour last week by three RCMP officers.

"My sense is that they're taking it very seriously," Jennings said in an interview Tuesday.

"My sense is that they're looking at this to see if there are any elements of proof that there may have been wilful intention to mislead Parliament."

An RCMP spokesperson said the force is evaluating the information before deciding whether to launch a formal investigation.

Foreign Affairs Minister John Baird shrugged the whole matter off as "a public relations stunt" by a defeated Liberal.

Jennings, who lost her Montreal seat in the May 2 election, first sought an investigation in the midst of the campaign. Her complaint was prompted by an early draft of the auditor general's report, which was leaked mid-campaign to The Canadian Press.

The early draft was much more blunt than the final version released on June 9. It concluded the government "misinformed" Parliament about the G8 legacy fund and suggested it may have acted illegally.

In an April 15 letter to the director of public prosecutions, which was copied to RCMP Commissioner William Elliott, Jennings said the government may have wilfully violated two appropriations acts and the Financial Administration Act. The acts stipulate that the government must disclose how it intends to spend the money when it seeks parliamentary approval for funding.

Jennings eventually received a May 24 letter from the RCMP, advising her that "the matter is with 'A' Division Commercial Crime Section."

The day after the final auditor general's report was released, she received a call from Cpl. Ray Warner asking her to meet with him. She was interviewed by Warner and two other officers last Wednesday.

Jennings said she never heard back from Brian Saunders, the director of public prosecutions. But a spokesman for Saunders said a letter was sent on April 21 to Jennings — and also copied to Elliott — advising that the director of public prosecutions does not "conduct or launch investigations."

"That's a job for the police," said Dan Brien.

The issue revolves around the way in which the government won parliamentary approval to create the G8 legacy fund in 2009.

The government received approval for a $83-million border infrastructure fund which was supposed to relieve congestion at border crossings. It did not disclose that $50 million of that fund was to be devoted to infrastructure projects in Treasury Board President Clement's Parry Sound-Muskoka riding, 300 kilometres away from the border.

The legacy fund was supposed to help Clement's riding prepare for hosting the G8 summit last June. It was spent on 32 projects, including gazebos, parks, public toilets and other beautification projects, many of which were hours away from the summit site in Huntsville, Ont.

Baird repeatedly reminded the Commons on Tuesday that John Wiersema, the acting auditor general, said there was no evidence the government was trying to deliberately mislead Parliament.

He also pointed to the fact that Wiersema said he was "not aware of any specific law that was broken."

Baird failed to mention that Wiersema subsequently conceded it's not clear if any laws were broken and suggested it's not up to the auditor general to make that determination.

"I think the legal profession could have an interesting, long debate about the wording of the Appropriations Act and whether or not this was inside or outside of the Appropriations Act. We chose not to go there," Wiersema said after tabling the report.

The final report also slammed the government for the unprecedented lack of a paper trail documenting how and why the 32 projects were selected to receive government largesse. It found public servants had no input into selection process, that projects were approved by Baird, then infrastructure minister, based strictly on the advice of Clement.

Wiersema called the complete absence of documentation "very unusual and troubling" and said he'd never encountered anything like it during his lengthy career as an auditor.

Baird said the auditor general's report raised "some legitimate concerns" about how the legacy fund was administered and that the government "fully accepted" the good advice.

Beyond those administrative difficulties, he said everything about the fund was hunky dory.

"The money was spent on each of the 32 appropriate projects, every single penny was accounted for, every construction project was on time, costs came in under budget and all costs recorded were used for the purposes intended."

New Democrat MPs said news of the RCMP's involvement explains why Baird has fielded almost all questions about the legacy fund. Clement, who is now in charge of cutting $4 billion a year in "fat" from government spending, has been allowed to say little in his own defence.

"If (Clement) gets away with this $50-million scheme, then start counting your spoons and silverware, dear public, because they've just given this man the keys to the Treasury Board," New Democrat MP Charlie Angus told the Commons.

Angus later said Baird's casual dismissal of the RCMP involvement reveals "a sense of smugness and entitlement that reeks from the Conservative benches.

"They don't think they're accountable. They think that the RCMP investigating them is a publicity stunt."

Liberal Leader Bob Rae said the RCMP wouldn't waste time reviewing the matter if they thought it was a "trivial" political stunt.

"I don't think this can be just sloughed off as a minor matter the way Mr. Baird has been doing in his ... continuing role as sort of the chief sort of bruiser for the government," said Rae.

"You've got to recognize that there is a serious problem here. If the Conservatives were in opposition, they'd be attacking the government by the neck."