08/15/2011 11:13 EDT | Updated 10/15/2011 05:12 EDT

NDP: Tony Clement Created G8 Slush Fund

OTTAWA - A $50-million legacy fund for last year's G8 summit was run out of the local constituency office of federal minister Tony Clement, documents show — a process that allowed the Harper government to avoid scrutiny by the auditor general.

The NDP discovered the paper trail by doing an end run around the federal government and using Ontario freedom of information laws to get municipal records.

The hundreds of pages of documents reveal Clement's MP office in Parry Sound, Ont., soliciting legacy project submissions more than 18 months before the June 2010 international summit in Huntsville, Ont.

And despite documentary evidence that federal civil servants sat in on many of the project meetings, no records were available to the auditor general when Sheila Fraser looked into the G8 spending late last year.

When Fraser's long-delayed report was finally tabled well after the May 2 election that returned the Conservatives with a majority, interim auditor John Wiersema had called the absence of documents "very unusual and troubling."

"There is no paper trail behind the selection of the 32 (funded) projects. I personally in my career in auditing have not encountered a situation like that where there is absolutely no paper trail behind this."

NDP critic Charlie Angus said the documents make clear that "many of processes were set up deliberately beyond the hands of the auditor general, and that's very disturbing."

The municipal documents obtained by the NDP include a "G8 Community Project Summary" application form, with no government of Canada identification, that was to be returned directly to Clement's local constituency office — not to his office as minister of Industry Canada.

Clement has since been moved to Treasury Board, where he is in charge of overseeing government spending cuts.

"It is completely unacceptable to use a constituency office, to use a home-made form, to set up a private process to spend taxpayers' money," Angus said at a news conference in Ottawa.

Angus compared the situation to the sponsorship scandal under the former Liberals that helped propel the Conservatives to power in 2006 — in part on public disgust at evidence revealed by the auditor general.

"The real issue here is for the prime minister," said Angus.

"This is a government that has to follow the rules. Ministers of the Crown have to be accountable. We cannot have rogue ministers or rogue governments setting up their own processes."

A spokesman in the auditor's office said in a statement that the G8 legacy fund would not be re-examined.

"The Office of the Auditor General has the authority to request documentation for funding of federal public money," said the statement.

"We asked for documentation, but we were not provided with any. Deputy ministers signed off on the accuracy of facts in the chapter."

The Prime Minister's Office directed all inquiries on the matter to Clement, who is on vacation. An official in his Treasury Board office responded with an emailed list of talking points, none of which address the specific concerns of the NDP.

"There is nothing new in these allegations," said the Treasury Board release, unsigned and in bullet-point form.

"The Auditor General has already fully investigated this spending and all information was made available to the Auditor General."

The email continues that the auditor "made recommendations to improve the administrative process," and that the government "appreciate(s) these recommendations and will improve the process in the future."

The NDP research is just the latest blow to a legacy fund that has been found to be fraught with problems.

Critics howled when they discovered the G8 spending included funding for public toilets, gazebos and other local beautification projects hours away from the summit site in Clement's sprawling Ontario riding.

The audit, released in June, found that the Conservatives passed off the $50 million G8 legacy cash as part of an $83 million fund to reduce border congestion when Parliament voted on the appropriation.

"I think we've moved well beyond the fact that Tony Clement took $50 million in border infrastructure money — money that would have helped trade, money that would have made Canadians more secure — and he spent it on gazebos and glow sticks," the NDP's Angus said Monday.