09/13/2011 12:59 EDT | Updated 01/12/2012 02:22 EST

Tories need same openness on G8 fund as Libs showed on sponsorship: McCallum

OTTAWA - The Liberals are challenging Stephen Harper's Conservative government to show the same degree of accountability on G8 spending that a previous Liberal government displayed in the wake of the sponsorship scandal.

John McCallum, the Liberal Treasury Board critic, gave formal notice Tuesday that he's asking a parliamentary committee to examine how $50 million was diverted from a border infrastructure fund into G8 beautification projects in the riding of cabinet minister Tony Clement.

The program has been called a Conservative "slush fund" by critics for funding civic projects literally hours away from the June 2010 summit site in Huntsville, Ont.

"I would point out that when we were in government and we had issues with the sponsorship scandal, that the Liberal government of the day ordered a value-for-money audit," McCallum, a former Liberal cabinet minister, told a news conference.

"If you have nothing to hide, if you believe that you are clean, then do two things: Allow the committee to conduct this study; and ask the auditor general to do a value-for-money audit."

An auditor's report in June found no rationale for why the 32 "Legacy Fund" projects were chosen in Clement's riding, nor even why the government settled on $50 million in funding when previous summits had spent only about $5 million on site upgrades.

Acting auditor general John Wiersema said in June that "going to Parliament requesting money for one thing and using it for something else is a serious matter which we think deserves parliamentary attention."

Wiersema also appeared dumbfounded that top civil servants told him there was zero documentation to explain the funding decisions: "I personally in my career in auditing have not encountered a situation like that where there is absolutely no paper trail behind this."

New Democrats subsequently found an extensive paper trail at the municipal level that revealed Clement, then the Industry minister, ran the project application process out of his local constituency office with the help of federal bureaucrats -- a system that effectively screened it from scrutiny by Parliament and the auditor general.

Clement is now president of the Treasury Board, a key department whose duties include ensuring the probity of government spending.

Clement has dodged most questions on his role in the legacy fund's operation -- deferring to former infrastructure minister John Baird -- and his office did not reply to a request for comment Tuesday.

Instead, a spokesman in Baird's Foreign Affairs office sent an email "on behalf of the government."

"What is clear is that every dollar spent for the G8 Legacy Fund has been accounted for. Not a red cent is missing," spokesman Chris Day said in the email.

There is nothing to compel the Conservative majority on the committee to investigate the G8 funding. And given Harper's past dismissals of the issue as "process problems," the prospects appear dim.

Charlie Angus, the NDP ethics critic, said McCallum's reference to the sponsorship scandal is appropriate, since "Conservatives have totally stolen the (Liberal) playbook: The sense of entitlement, the misuse of taxpayers' funds."

"The problem with sponsorship was the politicization of the civil service, to treat the civil service as an extension of the partisan political aims of the party. The Conservatives have gone way beyond that in a much shorter period of time," Angus said.

"The role of senior bureaucrats in basically hoodwinking the auditor general? That's serious stuff."

Angus doesn't believe government MPs will agree to investigate the matter at committee, but remains confident the truth will eventually come out in full.

"This isn't going away and people continue to come forward and provide information," said the MP.

"I think people are deeply offended that they pulled something this base."

McCallum still hopes to shame the Conservatives into action.

"The government came to power on the Accountability Act," he said, citing Harper's trademark 2006 legislation from his first months in office. "So the government should care about whether it is, and is seen to be, accountable and transparent in its dealings."

"If it simply uses its majority position to avoid any accountability, any transparency, I think it is contradicting a fundamental tenet of its existence," added McCallum.