Lavoie testimony, Part I: Luc & Brian, BFF

Former Mulroney Dep. Chief of Staff and PR flack Communications Director Luc Lavoie presented himself to the Commons Ethics committee on February 7. The following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate.

Luc & Brian, BFF

3:30 PM
Szabo (chair, LPC): (calls hearing to order; reminds cmte on pairing of witnesses-one witness is long and second shorter, less interest, so 2 rounds for 1st, less for second). Our first witness of the day is M Luc Lavoie, former communications director for BM, up to 2007. He's the exec VP of Quebecor Inc. On Dec 15, 2007, cmte gave list of priority witnesses, including yourself. Thanks for accepting invitation. I'll ask clerk to swear-in the witness (clerk swears in Lavoie).

Szabo (chair, LPC): I know that you've followed our proceedings and you're familiar with how they work. Certainly expected that you'll help us better understand certain matters. Refusal to answer not an option. As courtesy, don't speak too quickly for translators. Understand you don't have an opening stmt today, so we'll move directly to questions. M. Thibault?

3:33 PM
Thibault (LPC): thank you for being her, M Lavoie. First, I'd like to clarify: you said in media, in answering for BM, that he had in fact received 300K, 100K each time, in cash from Karlheinz Schreiber (KHS). Accurate?

Luc Lavoie: what I said is that I didn't have exact information

Thibault (LPC): you've been spokesman for Brian Mulroney (BM) for long time. Close relationship, professionally and personally. I fail to understand how you could answer that question w/o consulting your client, BM, on the matter.

Luc Lavoie: I never discussed the specific amounts w/BM. At no time. When I was answering those questions...

Thibault (LPC): the amounts discussed came from the meeting. When did BM tell you he received the money? Not when he got them, but when he received that money?

Luc Lavoie: informed in spring 2000 by BM's lawyer. Told he received a retainer, paid in cash, from KHS, and that there were 3 payments and the amount used in conversation w/o asking how much, he said 10s of 1000s of dollars.

Thibault (LPC): you told Cashore of CBC, that previous to this date that BM had NOT received money from KHS. At one point you used derogatory comments (*cough* "biggest fucking liar") in reference to KHS and exchange of funds. On what basis did you make those earlier stmts to media, that BM didn't receive funds.

Luc Lavoie: I remember very clearly those 4 telephone conversations w/journalist Cashore of 5th Estate and at NO time did he ask me about money paid to BM after he left his position...I was spokesperson for BM from 95-onwards, and the only thing discussed was money deposited in accts, in Switzerland having to do w/purchase of Airbus (AB), MBB helicopters and the Bear Head Project (BHP), so at no time during conversation was there any discussion regarding money paid AFTER he left PM-position. If you want to go to extreme position, I would have answered the same thing, b/c what we were talking about was something contained in letter sent to Swiss authorities in 95

Thibault (LPC): in Feb 98 BM met in hotel room w/KHS (note: this was the meeting in Zurich, when KHS allegedly reassured BM that there was no evidence linking him to cash payments). Aware of it?

Luc Lavoie: no

Thibault (LPC): you've been BM's spokesperson since 95 and he never told you?

Luc Lavoie: no

Thibault (LPC): subsequently, did he speak about that meeting?

Luc Lavoie: no, never heard about it

Thibault (LPC): the only knowledge of that meeting you found out through media?

Luc Lavoie: exactly

Thibault (LPC): did you ask questions?

Luc Lavoie: no

Thibault (LPC): you were his communications Director, he was your client, you worked closely with him, the question of KHS, this exchange of money was quite important but that discussion never happened? That meeting in 1998? Never talked about it?

Luc Lavoie: no

Thibault (LPC): excuse me, that's quite recent info. How do you feel about it, that BM never told you about it?

Luc Lavoie: I don't go into that...I was very proud to serve BM. Still proud of my friendship

Thibault (LPC): did BM inform you of the meeting he had in Harrington Lake in 93 w/KHS?

Luc Lavoie: no

Thibault (LPC): did he inform you about contract which, according to his testimony, was to do business internationally for Thyssen?

Luc Lavoie: at what time?

Thibault (LPC): during your professional relationship w/him

Luc Lavoie: well, before those things were made public, and then afterwards, from Nov 95, beginning of my involvement, till spring of 2000, no these matters were never raised. Starting in spring 2000, they were mentioned but never had detailed conversation on these matters

Thibault (LPC): when you were w/BM when he was PM, when was that?

Luc Lavoie: Jan 88 to Aug 91

Thibault (LPC): so when the settlement was signed, or agreement re: BHP, Thyssen, you were aware of that?

Luc Lavoie: no, wasn't aware of that

Thibault (LPC): you were the comm. Director

Luc Lavoie: was Asst Dep Chief of Staff (CoS). I looked after Operations.

Thibault (LPC): the file was one that was important in PMO. Heard that people came to visit BM, meetings w/Tellier, Spector, and that next CoS was involved in BHP as well. You tell us that you weren't aware?

Luc Lavoie: not at all, 'cept through media.

Thibault (LPC): it was a secret project?

Luc Lavoie: can't assume that, but a lot of things go on inside a PMO (ha! No kidding, eh?!)

Coming up next: Part II ("Why would an advisor give bad advice?")
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Allan Rock testifies, Part II: But I *trusted* you, lyin' Brian!

Former Attorney General and Minister of Justice (1993-7) Allan Rock presented himself to the Commons Ethics committee on February 5. As with last Fall's testimony, the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. Part I of Rock's testimony is available here. If you missed my coverage of Norman Spector's Feb 5th testimony, please click here.

But I trusted you, lyin' Brian!

5:12 PM
Lavallée (BQ): going to ask some repetitive questions. You said that BM testified that he had no dealings w/KHS. I looked at testimony in French and wondered why RCMP convinced BM didn't do anything wrong...(bad translation!)

Allan Rock: we, as participants in civil litigation, he said he had no dealings w/KHS. We accepted that. He was the former PM of Canada. He spent 9 years in the PMO. He was sworn in as a witness, so we assumed he'd answered the question properly. The Gov concluded at time that BM had not had any dealings w/KHS. Given his answers in April 96 (here & here)

Lavallée (BQ): Would you say that the RCMP should have investigated BM's testimony, and gone in the field to find out what happened?

Allan Rock: not up to me to say what RCMP should be doing. It was SG Gray who was in charge of RCMP. He reported on it to HoC, but in my view, I'm aware of fact that RCMP cont'd after settlement, up until 2003, when they announced they were going to close the matter.

Lavallée (BQ): do you regret the 2.1 Mill settlement?

Allan Rock: No, I would just say that it's difficult, in this position, in 2008, to look back and to imagine what we would have done had we had the info we now have. As said to M. Murphy, quite sure that if we'd had the info about cash payments from KHS, if that had been known at the time, that would have had a HUGE impact on the civil case, and IMO, would not have had recommendation to settle on these terms.

5:17 PM
Ménard (BQ): I understand that this kind of letter of request must not be shown to Minister. You've read it since then, though, this LOR to Swiss gov. Were you struck, as things evolved, that among the first people to be informed about all the doubts police had about some ind'ls that these ind'ls would be the first informed, given copies of letter?

Allan Rock: I was told at time that you had to give notice to the people who have the bank accounts in Switzerland. In other words, if the RCMP, through gov, asked for access to records involved related to Swiss acct, then holder had to be informed and given copy of LOR, which is why KHS and Moores received copy.

Ménard (BQ): they were informed of investigation and they had time to cause some accounting to disappear, particularly if we're talking about cash?

Allan Rock: they definitely had notice, but I've no idea what they did afterwards.

5:19 PM
Martin (NDP): I think I speak for all Canadians when I say that We want our money BACK (eyeroll). BM sued gov for 50 mill b/c we implied that he'd taken money from KHS. Well, he DID take money from KHS, and I take you at your word that you probably wouldn't have recommended a settlement if you'd known that then. Can't understand, why did we send letters of apology to Schreiber and Moores, as well as BM. Why did Gov feel need to apologize to them? Also, a lot of people feel that you folded too early, b/c Libs were eager to rid of investigation b/c if they dug too deep, they'd find out KHS was meeting with Andre Ouellette, and KHS was meeting w/ Doug Young, KHS was meeting w/(?? Missed it??). Schreiber was right into the LPC, just as he was into the Con party at the time. A lot of people feel you folded b/c didn't want LPC to get damaged.

Allan Rock: regarding letters, they were sent as a matter of logic and law. The advice we got from the dept was that the gist of the language used in the LOR was conclusory. Used to "alleged" but this LOR language asserted as a matter of fact that...

Martin (NDP): (interrupting) it's a little galling for Canadians to be apologizing to KHS for inconveniencing him.

Allan Rock: same language was used for other two letters as well. One of them had commenced a lawsuit also. In public interest to avoid that. In response to your other question, we were ready to go to trial in Jan 1997, we had expert witnesses...no fewer than 3-4 lawyers ready to go...subpoenaed witnesses. That night, I was told that in the fall of 95, an RCMP member had disclosed to a 3rd party that BM's name was in the LOR. If that had come up in the trial, it would significantly weaken our defence. I was ready to go to trial, and rely on our defences, until they were taken away for us. Under those circumstances, we went back to the negotiating table to make the best deal we could.

Martin (NDP): I understand that. Did you ever meet w/KHS while you were a minister?

Allan Rock: no. Never met the man.

Martin (NDP): did Marc Lalonde ever send KHS to you or other cabinet, lobbying on behalf of KHS?

Allan Rock: no.

5:23 PM
Mulcair (NDP): you said earlier that you didn't think--had no idea whether the RCMP knew of the cash payments and that Mr. Gray never raised it with you. But YOU were the one who settled the BM matter, so what did YOU do, actively, to find out where the file was at? Did you ask the RCMP what we know? Did you do that before you agreed to pay BM 2.1 mill in taxpayers' money?

Allan Rock: it was decision made by gov. I shared responsibility for responding in court. Did we do any investigating ourselves? No. We asked our legal team .

Mulcair (NDP): you're the first officer responsible for the admin of justice in Canada. You're about to write a cheque for 2.1 mill to a former PM for pain and suffering caused to him. What did you do, actively, to find out what situation was? It was YOUR decision!

Allan Rock: it was my recommendation, after we got the info from the lawyers involved. What did we do? We defended the action, we asked BM questions. Accepted his testimony.

Mulcair (NDP): what did the RCMP tell you? You must have asked them some questions.

Allan Rock: I'm sure that Mr. Gray, like myself, we looked at the facts before the courts to determine whether or not we could succeed. Once I was told that a member of the RCMP had...

Mulcair (NDP): that's an unproved allegation

Allan Rock: No, that's a reality before the court.

Mulcair (NDP): but you were the Minister. You made the recommendation. Did you ask what the RCMP knew about this?

Allan Rock: as the person in charge, along w/Mr. Gray, for defending Gov's interest in civil suit, had to do w/opinion of lawyers. Up to Jan 2nd, the lawyers thought we had a case. After finding out officer of RCMP had revealed-we realized we had to settle.

5:27 PM
Van Kesteren (CPC): while you were Min Justice, you had commenced an investigation of Air Canada purchase of AB and BHP, etc. Let me remind you that on April 22, 2003 the RCMP admitted that, after exhaustive investigation, that no wrongdoing involving AB or BHP weren't substantiated. No charges laid. Do you have evidence of any wrongdoing by any public official regarding the BHP?

Allan Rock: no. May I quarrel w/your premise? I didn't start the investigation; the RCMP did. And I didn't stop the investigation; we settled the lawsuit.

Van Kesteren (CPC): any evidence of any wrongdoing wrt consulting agreement btwn BM and KHS?

Allan Rock: no

Van Kesteren (CPC): any evidence of any wrongdoing by any public official wrt circulation of correspondence between PCO and PMO, especially correspondence sent by KHS to PMS?

Allan Rock: no

Van Kesteren (CPC): any evidence of any wrongdoing by any public official wrt the AB purchase?

Allan Rock: no

Van Kesteren (CPC): given that the settlement reached in 97 was specifically tied to defamatory stmts made about him wrt AB scandal, would now public knowledge that BM and KHS had separate consulting agreement, unrelated to AB given you reason to reconsider the settlement?

Allan Rock: in response to an earlier question, I don't believe there would have been a recommendation to settle had we known about THAT cash, but having said that, we might still have settled since the lawsuit was about language used. It's a question of what terms it would've been settled on. The cash might have had a very significant effect on settlement. This case was all about reputation, and BM's concern that the LOR language had tarnished his reputation. But cash payments would've also tarnished his reputation. Had that disclosure been in 96 or 97, we would have been dealing w/diff set of facts. Either we'd be pursuing the trail (records, bank, taxes), but perhaps there would have been a settlement on other terms.

Van Kesteren (CPC): back to LOR from Sept 1995. When did you personally become aware of letter?

Allan Rock: Sat, Nov 4, 1995. Telephoned by BM's lawyer.

Van Kesteren (CPC): why didn't you act right away and squashed that thing, so we wouldn't have had that exposure?

Allan Rock: we met w/officials on Monday, Nov 6 where I read letter to myself. BM's lawyers asked it be withdrawn, but when I asked about that, it was too late. LOR had already been acted upon. Remember that this was before the Financial Post article was published. Our concern on Nov 6th was confidentiality. If an effort was made to w/draw it, it might gain more attn. Instead, we sent 2nd letter to Swiss asserting that original LOR was only allegation, and that we respect confidentiality.

Van Kesteren (CPC): ok, now I gotta ask you this question: was there pressure w/in the caucus that "hey, this is something we gotta do"

Allan Rock: no. No discussion in caucus on this. What motivated me was doing the best I could in the interest of all parties: BM, RCMP, etc. Sending followup letters to swiss, and then on Nov 18th, the top blew off b/c Fin Post published most of the letter and then BM announced his lawsuit against government.

Van Kesteren (CPC): who leaked the letter to the Swiss authorities? (Dumb-ass...nobody LEAKED to Swiss. Leak to Fin Post)

Allan Rock: Who leaked to Swiss? It wasn't leaked. Canadian consular official provides copy to Swiss authorities, police, banking etc. It wasn't a leak, it was a delivery. The question is who leaked LOR to Financial Post? Had an expert witness who would have sworn that it wasn't the Gov who leaked it to newspaper. Re: 2.1 mill settlement, the Gov agreed to apologize for the LANGUAGE of the letter, not an apology for the investigation. It was the language used that was the essential harm here.

Szabo (chair, LPC): on page 116 on BM's Day one test, he said he never had any dealings w/KHS. On Nov 10, 2007, in interview w/G&M, in which he admitted to receiving 225K, that is a direct contradiction to sworn test in discovery. Is there any recourse to reopen settlement?

Allan Rock: there is a procedure by which lawyers can move before the court...whether it should take place is a matter for the Minister of Justice and Dept Justice to decide.

Szabo (chair, LPC): thank you. Mr. Rock has agreed to answer any other questions in writing if you have any questions...

Tilson (vice-chair, CPC): (interrupting) ??? We never asked him...

Szabo: I asked him...

Tilson (vice-chair, CPC): but you had no right to...(?!)

Szabo (chair, LPC): well, thank you.

Tilson (vice-chair, CPC): once again, you just carry on your way, the way you see fit...

Szabo (chair, LPC): thank you, Mr. Tilson. Mr. Rock, thank you again, our next meeting is Thurs, 3:30PM, we'll have Luc Lavoie and François Martin.
*adjourned*

Return to Part I ("And the LANGUAGE that they used...").
...and stay tuned for the Feb 7 testimony! I promise I'll get to it!
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Allan Rock testifies, Part I: And the LANGUAGE that they used...

Former Attorney General and Minister of Justice (1993-7) Allan Rock presented himself to the Commons Ethics committee on February 5. As with last Fall's testimony, the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. If you missed my coverage of Norman Spector's Feb 5th testimony, please click here.

And the LANGUAGE that they used...

4:55 PM
Szabo (chair, LPC): (introducing Allan Rock, former AG of Canada during the AB settlement; overview of rules of cmte). Would you like to be sworn in?

Allan Rock: I'd be happy to be sworn in . (clerk swears him in)

Szabo (chair, LPC): I understand you have an opening stmt...

Allan Rock: thanks. I know that we've got just 45 min before the vote, so I'll be reading my stmt. I believe it's been distributed to members, but I've tried to provide a framework for your questions. I served as Min Justice and AG from Nov 93 to June 1997. Recall that in dept Justice at time, there's something called International Assistance Group, lawyers who provide advice from other governments, eg regarding extradition. The IAG transmits to foreign authorities requests from Can police services to foreign police. The lawyers would send as a formal request from Gov Can for assistance. As 1995, 100-150 requests for assistance from justice on behalf of police depts. Every year. These letters were always treated by Dept w/utmost confidentiality. I'm told that there's never been an instance, before this one, where the contents of letter became public, notwithstanding that some of them named well-known figures. Wasn't setup to inform Minister as a matter of course. Min had no role in approving/disapproving letter going forward. Matter for police, and would be improper to have Min or AG interfering.

Allan Rock: We know that on Sept 29, 1995 a LOR went forward to the Swiss authorities on behalf RCMP, w/info about, among others BM. I was not informed or consulted before that letter was sent. I first learned of it on Nov 4th of that year, when I was telephoned at home by Roger Tasse (BM lawyer). I asked that he speak w/my Deputy Min, which he did. On Nov 6, I read letter for first time. BM's lawyers wanted LOR withdrawn. Justice and RCMP said it couldn't be, b/c already acted upon. Copies already given to KHS and Frank Moores. Also worried if an attempt was made to w/draw it, it might draw MORE attn, as it had not yet been mentioned in the Financial Post. Justice did send a followup letter to Swiss, emphasizing that everything in LOR was nature of allegation only, and must be read as such. Secondly, letter asked for scrupulous respect of confidentiality. That letter sent on Nov 14th to Swiss.

Allan Rock: On Nov 18, 1995, Financial Post published story about LOR, quoting at length of its contents. No explanation re: how FinPost obtained LOR. On that same day, BM's lawyers called presser in Montreal to announce that they were launching a libel action against gov and RCMP and asking 50 Mill in damages. Gov and RCMP defended action, and made efforts to resolve litigation w/o going to trial. BM examined under oath. Answers BM gave lead gov to conclude that he'd not had any dealings w/KHS. Two defences: any communication was protected by either absolute or qualified privilege (no action could be brought); second, none of defendents published libel.

Allan Rock: Letter served KHS in German language. Someone allowed for lawyers to translate this into English-call this the "Bloom(SP?) translation." An expert who prepared report, to prove version published in Post was Bloom translation--demonstrated link. If we could prove that the reporter had used this translation, then we could show in a courtroom that persons other than the defendants had published the libel.

Allan Rock: Shortly before trial, the DoJ learned that someone in RCMP, sometime in late 1995, had disclosed to 3rd party the fact that BM's name was in LOR. Counsel advised that unauthorized disclosure would destroy our first defense, that of disclosure, and weaken our second defense. We then proceeded to enter settlement negotiations, which (Fmr. Solicitor General) Herb Gray and I announced agreement on Jan 7, 1997.

Allan Rock: There have been suggestions from the outset that the RCMP investigation was begun for partisan reasons. The settlement agreement signed by BM lays out their perspective on this: paragraph 8, the parties acknowledge that procedure used in sending LOR was same as used in previous occasions. In para 9, parties acknowledge that RCMP on its own initiated investigation, that I was not involved, and that before Nov 4, 1995, I was not aware of LOR. We all learned that using language which is conclusory when talking about allegations is wrong. I asked for that to change and appointed (someone) to look into procedures in issuing LORs. I put those recommendations in place. I am now happy to answer questions.

5:05 PM
Murphy (LPC): You mentioned that you and former SG Herb Gray announced your intention to settle in Jan 97, but wasn't until late that year that you announced the final amt of the settlement. Either at the time of the Jan presser or Oct settlement, did you become aware of the cash payments made to BM (either 225K or 300K)?

Allan Rock: no

Murphy (LPC): you're no stranger to a court room. You know what I mean by a plea deal. In BM's pleading, said that he'd never had any bank account in a foreign country, although he's since admitted to having safety deposit boxes in various countries, and said he'd never received alleged payments in request for assistance, and I don't have to remind you that Mr. Schreiber's name is there in the request for assistance. In discovery, where Gov lawyers concluded BM had never had any dealings w/KHS, this discovery was in April 96 (here and here), and they go on to paint relationship between the two as 'just in passing,' re: German unification interests, and that KHS had coffee w/BM a few times. Did you review any of the discovery transcripts or were you fully briefed?

Allan Rock: I believe there was press coverage and I was briefed on the main points of discovery. I was generally aware of what was asked.

Murphy (LPC): heard from Norman Spector that BM and KHS had more than a relationship in passing. Also said that certain people have used 'AB' as a vague shorthand for the whole affair. Would you consider, knowing what you know now, i.e. that KHS gave BM 225-300K, would you consider vague to say "I had never had any dealings with him?"

Allan Rock: well, I'm not going to try to interpret what BM said. I CAN tell you, I guess, first of all, certainly the gov concluded from BM's testimony that he'd not had dealings w/KHS. And second, I was surprised to learn subsequently, in 2003, that there had been payments to BM.

Murphy (LPC): would you still recommend that the gov enter into the 2 mill settlement w/BM (if you had the same position NOW in government)?

Allan Rock: difficult to be categorical. I can say that, had there been disclosure at the time of the cash payments made to BM, it would have had a dramatic effect on that litigation. A profound effect. Questions would have been asked, docs would have been requested, safety deposit box records, tax returns...

Murphy (LPC): you would not have authorized settlement if you'd known of cash payments.

Allan Rock: assuming that they had been disclosed...we wouldn't have settled on THOSE terms, which isn't to say we wouldn't have settled on OTHER terms, but ...

Murphy (LPC): did you believe that the RCMP didn't know of these cash payments at the time of the settlement? Mr. Spector certainly feels that the RCMP didn't know about cash when they shut down investigation.

Allan Rock: I have no idea what they knew. They never raised it w/Mr. Gray, and Mr. Gray certainly never raised it with me.

Murphy (LPC): as far as RCMP investigation...did they continue to ack the investigation was going on, even after the settlement?

Allan Rock: yes, that was one of the terms of the agreement, that the RCMP would have the sole discretion to continue the investigation until they felt it had been concluded.

Murphy (LPC): memoranda suggest (from DoJ) that they considered trying to get this settlement money back, after learning of the cash payments. Do you find it surprising that the ministers of Justice (Toews, Nicholson) weren't briefed on attempts to get back the settlement funds?

Allan Rock: I don't know what they were/weren't briefed about. Could ask court to set aside settlement agreement if determined on something less than full disclosure. I'm not here to give advice to the Justice Dept, which I'm sure they won't need, nor political advice, which I'm sure the gov wouldn't accept (big smile)
(laughter)

Continue on to Part II ("But I *trusted* you, lyin' Brian!").

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Raising the Spector, Part V: The return of Grumpy Old Tilson

Former Mulroney Chief of Staff Norman Spector presented himself to the Commons Ethics committee on February 5. As with last Fall's testimony, the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. This is the final installment of Spector's testimony. You can return to the beginning of this 'series,' by clicking here: Part I. Stay tuned for coverage of Fmr. Attorney General (and Minister of Justice) Allan Rock!

The return of Grumpy Old Tilson

4:35 PM
Mulcair (NDP): could you give name of the RCMP investigator who interviewed you?

Norman Spector: I answered chair, it was Mr. Matthews

Mulcair (NDP): you said you had another example to give to the cmte?

Norman Spector: I wrote about this e.g. in the afterward to the Kaplan book (gaaaaawd, enough about your stupid book).

Mulcair (NDP): published? Not reported but published?

Norman Spector: involves Winnipeg as well.

Mulcair (NDP): last thing: you referred to mandate of inquiry, you said rightly that PM promised full public inquiry. After his musings over Xmas, when he said mightn't be necessary, and Johnston says "well tilled ground," and he quotes Cameron to back that up. About 10 Mill, do you think the inquiry's broad enough to follow that up? Should this cmte subpoena records, tax, etc. Or does inquiry have enough of a mandate?

Norman Spector: I think the cmte should followup on these matters.

Mulcair (NDP): about Johnston's mandate?

Norman Spector: it's not broad enough.

4:37 PM
Hubbard (LPC): (yay! Kindly old ramblin' man is back!) You bring us a very interesting story as a career pub servant. You must have been very uncomfortable, watching cash being handed around and the cheques were made out in YOUR name, etc. We also found out, after you went back to BC, when the two parties were talking about merging (Reform and PC), you said you had a conversation with PMS. Mr. Harper and you discussed situation and conversation (according to you) went around relationship that Harper might have w/BM. You gave Mr. Harper some recommendations about BM relationship: you know that recommendation wasn't followed, as recently of 2006, PMS was happy to exhibit BM as one of the main architects of his victory in 2006. When you bring evidence today, about work in PMO, the advice you offered and situation as it was, with respect to people you saw coming & going to see BM, can you give our cmte the names of any of these people?

Norman Spector: I didn't recognize any of those people. I DID meet w/Harper in 2003, after article on cash payments appeared in G&M. Harper had a pained look on his face and asked me, "what should I say?" I didn't give him any advice. I was writing for Globe at time. You've put words in my mouth. I thought it was inappropriate for someone in my position to be giving political advice. I think Harper made a mistake. It's a mistake a lot of people in this country made. Only have to think back to this past September, in a 2h presentation by CTV by their chief anchor on Mr. M. It was a full blown PR exercise, and at very last min had a puffball question about cash. If entire CTV news time didn't smell something (laughter) that would have said 'proceed w/caution,' and if most experienced journalist in Canada, Lloyd Robertson didn't think, "whoah, there's something here that we should be very careful about," why would Harper, poor Stephen harper say "let's be careful about this."

Szabo (chair, LPC): you started off, provided us with puzzle pieces and challenged us to put them together. You talked about 10 mill and where did it go...do you have any evidence that this money is from Thyssen or KHS or any of his companies?

Norman Spector: it's what came out from German justice system about KHS. KHS had 10 mill to dist in Canada. Either he kept it, kept part of it, or distributed it.

Szabo (chair, LPC): are you suggesting that any monies from Thyssen, KHS, or any of his comps got into the PC Canada Fund w/spec directive that they be earmarked for BM?

Norman Spector: no evidence

Szabo (chair, LPC): re BHP, you knew it was cancelled in 1990, subsequent discussions about relocating in Montreal (Benoit Bouchard involved at time). How do you explain to Canadians that after the PM killed multi-mill project, how do you explain that it was still alive? Did BM want to create impression that it was still alive?

Norman Spector: well, that's the smoke of this whole thing. Peter Lougheed, a conservative, had instructed cabinet never to meet w/KHS; Crosbie would never meet w/KHS. And yet KHS had all this access to the PMO, to the point where I met with him. And to the PCO, where Paul Tellier met with him. There weren't a lot of Canadians who paid a courtesy call to Harrington Lake...

4:45 PM
Szabo (chair, LPC): I understand. B/C you're familiar w/BHP, can you give us a plausible explanation for why this should have been marketed to China, France, Russia, other countries...

Tilson (vice-chair, CPC): (interrupting) it's almost a quarter to ....

Szabo (chair, LPC): Ya, I understand...

Tilson (vice-chair, CPC): Not "Ya," you're going on & on..we're either gonna hear Mr. Rock (Allan Rock) or we're not gonna...we're 15 minutes behind schedule!

Szabo (chair, LPC): our expectation is that we won't have as many questions for Mr. Rock...

Tilson (vice-chair, CPC): But how do you KNOW, sir? You've taken over the meeting, Mr. Rock was scheduled for 4:30 and it's now quarter-to-five! (Szabo interrupting) No! Let's end it!

Szabo (chair, LPC): Mr. Spector, do you have any final words for us?

Norman Spector: good luck. My sense is that DND was not gonna buy these things. They were dead set against them. The only poss way to go would be to find an offshore company somewhere.

Szabo (chair, LPC): thank you, Mr. Spector. Suspend for 5 min.

Return to Part IV ("Hey! You invited *me*!"), Part I ("Don't let this become Frank Magazine"), or Continue on to Part I of my Allan Rock coverage ("").
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Raising the Spector, Part IV: Hey! You invited *me*!

Former Mulroney Chief of Staff Norman Spector presented himself to the Commons Ethics committee on February 5. As with last Fall's testimony, the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. You can return to the beginning of this 'series,' by clicking here: Part I.

Hey! You invited me!

4:21 PM
Hiebert (CPC): you told us about the system of cash being used at 24 Sussex. Can you explain what relevance that has to our study?

Norman Spector: ask yourselves that. You're the ones who've asked an EX-CHEF to testify. I've been invited to test about BHP, and as citizen Canada, I feel responsibility to help. I'm here to tell you not to get diverted by these wild goose chases. We're looking for 10 mill dollars. Not looking for reconciliation of Stevie Cameron's book, what the chef may or may not have seen at 24 Sussex...it's a vivid description, but you're chasing (from what I know), what I think you should do is subpoena bank transfers, etc. Find out what KHS has, if he has something, or whether he's just tearing the guts out of this country. He may have something (pounds fist). Let's find out! What are we waiting for? So, he'd stay in Canada. So what? We won't clean up our system of gov until we get to the bottom of this story.

Hiebert (CPC): best way is public inquiry. (huh?! The Cons are keen for an inquiry?) If you don't think the cash transfers aren't relevant, why are you bringing them up?

Norman Spector: I wrote about this in the afterward (to Kaplan's book). And you invited me!

Hiebert (CPC): we didn't invite you, it was members of the opposition (oh! You little shit!)

Norman Spector: you are ONE committee! (Old Man Tilson, the Conservative vice-chair interrupts: "We have no say over here!")

Norman Spector: ok, if we're talking about the conservative side of this cmte now...(*snerk*)

Hiebert (CPC): I'm asking you if you have any ethical or moral or legal concerns about these cash payments

Norman Spector: (lots of grumbling on CPC side; Szabo calms them down, so NS can respond) I find it interesting, your statement about the public inquiry, that it's the way to go, particularly when Harper, in Xmas interview said maybe we don't need one. And then we got the (Johnston) report suggesting very narrow area of inquiry. And I accept M. Ménard's disclaimer: that the 10 min rule is a problem. Kaplan suggested that...

Hiebert (CPC): Mr. Spector, can I take it from your avoidance of the question that you don't want to talk about the cash transactions?

Norman Spector: obviously I have no problems about them. Particularly since I'd been told they passed muster with CCRA. I wrote about that and it's been on the public record for over three years!

Hiebert (CPC): can I ask you one last question? (you're asking to ask?) Where did you get these docs?

Norman Spector: file from PMO, which I asked to have made before I left. Thought I was asking for records of only my involvement in this, but apparently there was more in the file. First time I looked was 2 wks ago, when I was preparing for this cmte. Big surprise.

4:25 PM
Lavallée (BQ): Would you say that the handling of cash was common practice at 24 Sussex?

Norman Spector: all I know is what I read in daily news

Lavallée (BQ): organized system?

Norman Spector: I've no info on that question.

Lavallée (BQ): with respect to GCI and Doucet, the lobbyist who had his own company w/brother. Did you see any others with such good access to BM or was Doucet chief?

Norman Spector: during my time there, it was just him.

Lavallée (BQ): no other guy had such access to the PMO? Did you recognize people who he brought in who didn't look like "scouts?" (Girl Guides)

Norman Spector: no

Lavallée (BQ): did you think that the 300K that BM got from KHS (or 225K) after 93, do you think there's a connection to AB?

Norman Spector: don't know

Lavallée (BQ): what acct did cheques come from? You said PC fund, but Stevie Cameron said that there was a special fund setup by former Sen. Charbonneau to meet needs of BM. She even has acct#, institution, Montreal Trust, #830.

Norman Spector: don't think there's a connection to Cameron's "version," but you'll see that for yourself.

Ménard (BQ): you told Le Devoir that you'd help cmte understand the motivation and behaviour of your former boss by referring to other files. You want to refer to other files?

Norman Spector: under impression that BM had one eye on life after politics and that he was courting people with power and money.

Ménard (BQ): what do you mean by courting?

Norman Spector: give two e.g.. (1) decision by National Post to kill story, BM named Conrad Black to Privy Council. Someone from outside named to Privy Council. Asper family was greatful for his intervention in Milgaard case, so it was extraordinary for PM to intervene in matter like Milgaard.

Ménard (BQ): not going to convince us...you said you'd arrange for him to be reimbursed for expenses to the (PC) party. But you didn't see anything wrong with that? Did you not think that something needed to be changed?

Norman Spector: in MY day in the PMO, there was a system where payment 5K/month to PM in place, to my knowledge. Not a huge amount of money (it's NOT?!)

4:31 PM
Hiebert (CPC): at this point we've concluded that you have no new evidence with respect to wrongdoing and that you didn't think there was anything wrong/unethical about payment system setup for the former prime minister, but you've been quite adamant that we can find ways to avoid this kind of thing in the future. Are you aware of the "Accountability Act?" (BLECCHHH!) What other suggestions would you have for the cmte?

Norman Spector: first, to the preamble to your question, I HAVE presented new evidence...

Hiebert (CPC): of what?

Norman Spector: evidence of system of reimbursements that I was NOT aware of when I wrote the afterward to the Kaplan book. What I've written in Le Devoir and Globe, that's new evidence. I've said that I have no info about it, not in a position to cast judgement on its appropriateness. Before you put words in my mouth...(Hiebert tries to interrupt)....SECONDLY, I am aware of the reforms, and they should go some distance, but I'm also aware that the PM said he'd make Deputy Ministers accountable to cmtes of parliament and he's not done so. Fight between Public Accounts and PCO over protocol. Aware that lobbyist reg rules aren't quite what PM promised. One thing that would help: keep lobbyists from participating in political...should be kept out completely, including in media. Anyone reg'd as lobbyist, should be no special access to party in power. No debt to them. I think there's a legit role for industry, but should be based on expertise, not on so & so was in the War Room or so & so ran buses for campaign.

Hiebert (CPC): well, Mr. Schreiber...

Norman Spector: Spector!! (laughter)

Hiebert (CPC): ok, Mr. Spector...I'm still at a loss b/c you've said there's nothing unethical or illegal about payment system and I've given you opportunity to provide new evidence and I've heard none. If you're talking about the ...

Norman Spector: well maybe you should read the transcripts (?) and study them before François Martin comes to testify (*snerk*)

Continue to Part V ("The return of Grumpy Old Tilson") or return to Part III ("Brother, those ain't Girl Guides!").
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Raising the Spector, Part III: Brother, those ain't Girl Guides!

Former Mulroney Chief of Staff Norman Spector presented himself to the Commons Ethics committee on February 5. As with last Fall's testimony, the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. You can return to the beginning of this 'series,' by clicking here: Part I.

Brother, those ain't Girl Guides!

4:07 PM
Hiebert (CPC): it's well known that the RCMP spent years and likely millions of dollars investigating Airbus (AB) purchase by Air Canada and Bear Head Project (BHP). But the RCMP concluded that the remaining allegations could not be substantiated and no charges will be laid. First of all, do you have any evidence of wrongdoing, by any public official, relating to AB?

Norman Spector: I wasn't in Ottawa when the AB contract was...

Hiebert (CPC): so you have no evidence

Norman Spector: (annoyed) with respect, your cmte invited me here today. You knew I was not in Ottawa in 1995. Don't know why you're interrogating me today. You clearly thought that the things I've written--assuming you've read them--(*snerk*) this cmte clearly thought I had relevant things to say. (Man, is he annoyed!) As to your citation of RCMP's stmt, I don't believe them! And I think Canadians are very sceptical of the RCMP, for all kinds of reasons, including those which have taken place in BC recently. Or a certain announcement that took place in the last election campaign. I don't believe them! I think you should get them here, under oath, and I'll give you the name of the inspector...I think the RCMP is part of this problem.

Norman Spector: You're from BC, so you know: we've had two premiers investigated by special prosecutors, criminal charges laid, and both acquitted. Our justice system doesn't demand convictions. Third premier investigated and not charged and BColumbians said, "that's fine, too." In Ottawa, the score card is ZERO, at whatever level of executive council. I've worked in Victoria and in Ottawa and I can tell you, that politicians in Victoria are no more corrupt than in Ottawa. You need a transparent process. Stephen Owen, his recommendation, as ombudsman of BC, to ensure equal justice, sometimes you have to put in place special arrangements for political cases. In BC, when allegation made against politician, assistant AG, a career public servant hires an outside counsel, hired by Bar association and that person investigates. That is a clean system, one that's used by British cousins (or looking into it, anyway). It's the system that Harper talked about in last campaign, a special prosecutor's office ...that's what we need in Ottawa to stop the slide in Transparency International numbers.

Hiebert (CPC): I appreciate that, Mr. Spector, and I'm glad to see those (TI) numbers improve over the last few years (barf!). I wannu give you the opportunity to give evidence of wrongdoing, relating to consulting agreement btwn BM and KHS, or with respect to AB, these are all elements of mandate of cmte.

Norman Spector: no evidence one way or another

Hiebert (CPC): re Cape Breton BHP, when was it finally rejected by govf?

Norman Spector: I don't know that it ever was

Hiebert (CPC): but you mentioned that BM killed it...

Norman Spector: he did, but it seemed to come back, it was like the Phoenix (eye-roll). Give you two anecdotes, one from Harry Swain, dep min, at his first briefing of his minister, John Manley. He asked if Swain had any advice for a new minister, and he said he had two pieces of advice: first, you should read "Yes, Minister." Secondly, don't ever meet w/KHS. Second anecdote by Glenn Shortliffe (former clerk of Privy Council) talking about BHP, it was like whackamole. Want to know if more than smoke there. Wouldn't die.

Hiebert (CPC): can you tell us what you told RCMP when they asked you about the BHP?

Norman Spector: to save you time, it's all in the stmt that I gave them. Avail to your cmte. Sworn, signed stmt. All there and I wouldn't change a word.

Hiebert (CPC): any new info?

Norman Spector: I have new info, learned subsequently that BHP didn't die. When I left PMO, I thought it was dead. When I came back from Middle East, I was astonished to learn that Marc Lalonde was involved in some way...

Hiebert (CPC): do you have any evidence relating to BHP (new)?

Norman Spector: no

4:14 PM
Szabo (chair, LPC): with respect to the identity of the RCMP officer you referred to, was that Insp. L. Matthews?

Norman Spector: yes

Szabo (chair, LPC): wrt expense report, the 101K from 96-97, annualized to 135K, can you confirm that reimbursement of personal expenses (Palm Beach trips, Rome, flowers, theatre...) all personal not having to do w/his work as Prime Minister?

Norman Spector: it says "personal" as you can see for yourself

Szabo (chair, LPC): you said that it was determined by Revenue Canada that these weren't taxable?

Norman Spector: (emphasizing) On the FIRST arrangement. I know nothing on this arrangement, including relating to taxation

Dhaliwal (LPC): as PC party treasurer in early 90s, was Jim Prentice aware of those payments to BM?

Norman Spector: never knew Prentice. Didn't know him then and don't know him now. My understanding is that current Sen. Angus was a key player in these arrangements.

Dhaliwal (LPC): you mentioned that while Doucet was lobbyist, that he would bring people to BM's office and wouldn't be on the schedule. Can you explain?

Norman Spector: most of you are aware of the office upstairs, the PM's corner office-one side you'll find the secretary, and other side, there's an office where CoS worked. I would work in the Longevin office most times, but sometimes I'd be in little CoS upstairs. I'd see Doucette bringing people to see BM, and "they didn't look like Girl-Guides going in to get their photos taken with the PM" They were wearing suits.

Dhaliwal (LPC): do you have a copy of your stmt to RCMP in 1995? Can you table it?

Norman Spector: sure. If you don't have it, pleased to give it to you.

Dhaliwal (LPC): was it Lowell Murray who informed you that it was Hugh Segal who took over BHP?

Norman Spector: I was out of the country, and saw article in Globe saying Lalonde and Mr. MacKay had posted bond for Mr. Schreiber-in 1997 or 98. I'd worked very closely w/Lowell Murray during Meech Lake and asked him "what gives? I thought project was dead" and he said, "Oh no, it kept coming back, and even Hughie had dealt with it." I'm not accusing Mr. Segal of any wrongdoing, I'm just saying that the BHP had come back during Segal's time and Mr. Segal gave it (BHP) the back of his hand, too. That was before KHS did courtesy call at Harrington Lake (1988 end of term).

Dhaliwal (LPC): you know KHS has filed a suit against gov for not following through on 88 understanding in princ. When did KHS first raise this with you?

Norman Spector: he never raised this with me, but what I found most offensive about dealing with (KHS) was that he was basically engaged in process of character assassination of public servants. Alleging that his difficulties were the result of certain officials being in the pockets of General Motors (?!), who were the supplier of LAVs to military. These people were my colleagues and I knew they weren't in anybody's pockets.

Continue to Part IV ("Hey! You invited *me*!") or return to Part II ("What's a nice hack like you doing in a place like this?").
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Raising the Spector, Part II: What's a nice hack like you doing in a place like this?

Former Mulroney Chief of Staff Norman Spector presented himself to the Commons Ethics committee on February 5. As with last Fall's testimony, the following is NOT a transcript, so quote at your own risk ;) Time-stamps are approximate. You can return to the beginning of this 'series,' by clicking here: Part I.

What's a nice hack like you doing in a place like this?

3:51 PM
Lavallée (BQ): Thanks for being here. You would agree w/François Martin who said at 24 Sussex, cash came as though it were from heaven. Culture of cash. Why were cheques made out to you? Why not to BM or Mrs. M?

Norman Spector: good question and I can't answer it. Perhaps I've raised some issues today that need answering. First meeting w/BM when offered job, he explained that all my predecessors had performed that duty and that that would be one of them. Second point, it seemed reasonable, first of all, I knew Mr. Davis (Premier Ontario) had arrangement of this type. Used to work for BC provincial politician.

Lavallée (BQ): was he paid directly by cheque? (former boss in BC)

Norman Spector: don't know, I wasn't involved directly in the process as it existed in BC. He had a principal secretary in his office.

Lavallée (BQ): when you got cheques, did you have to provide invoices or receipts?

Norman Spector: submitted by Mrs M and someone from our staff looked to see which ones qualified

Lavallée (BQ): were they mainly personal?

Norman Spector: I don't know. I trusted that individual on my team (public servant from foreign affairs) that he would do it properly

Lavallée (BQ): you didn't wonder, then, why not give money directly to BM? Even an intelligent person like yourself? (BTW, I *heart* Lavallée! Such a flirt!)

Norman Spector: even an intelligent person like myself didn't wonder about that...(*snerk*)

Lavallée (BQ): surprising

Norman Spector: yes, it is

Lavallée (BQ): but it was to add to the salary of BM who was making...

Norman Spector: I wasn't present at the meeting w/party and BM when reached the agreement on this arrangement. All I know is that it existed

Lavallée (BQ): on the 14th Nov last year, you said that the BM/KHS affair could be one of "the worst scandals in Canadian history." You really think that the behaviour of the Conservatives at the time, was worse than sponsorship?

Norman Spector: I don't know, which is why I'm asking you to pursue this matter. There's at least 10 mill dollars and don't know what happened to it.

Lavallée (BQ): where do you think it went?

Norman Spector: don't know, but not ruling out possibility that KHS kept it for himself. Don't know.

Lavallée (BQ): turn floor to M. Ménard

3:56 PM
Ménard (BQ): I accept your assessment but I disagree with you about this cmte-this cmte does not allow us to get to the bottom of things unless we take a huuuuuuge amount of time. We have just a few mins to ask question, so nothing like commission of inquiry.

Norman Spector: I'm impressed by your skills (Menard's X-exam of BM) in questioning BM. I was really struck...(Ha! Now look who's flirting!)

Ménard (BQ): (laughing) we've no time for compliments! Later, please! (*snort*) Let's get to the heart of the matter...you've given us a few figures, 60K/yr in nine months and 100K...all this money that was coming in, it came from same source? PC Canada fund?

Norman Spector: yes

Ménard (BQ): you started your intro by talking about the culture of lobbyists that existed. If I understand correctly, someone who wanted to influence gov couldn't give money directly to PM, but coulda given it to PC fund?

Norman Spector: no, I'm speaking out against system that exists in Ottawa...KHS said it, in order to do business in government of Can, you have to hire a lobbyist

Ménard (BQ): in Québec, everyone thinks it would never happen to René Lévesque

Norman Spector: (chuckling) I remember some stories about "Oxygene" ...it is a bipartisan problem in Ottawa. There's also the NDP and Bloc, who've never been in gov. Not the case in Québec. There are some stories...

3:59 PM
Martin (NDP): thank you for taking part in this wretched process...as wretched as it may be, it's all we have currently. Mr. M has said over and over again that he had nothing to do with choice of Air Canada to purchase AB, and yet he fired 13/14 Board of Directors at AC in '85. You were CoS?

Norman Spector: no, I wasn't even in Ottawa then...I arrived in 1986. The RCMP came to ACOA looking for copy of the agreement in our files, b/c ACOA was the lead agency. It was only by accident that I was there. They didn't come looking for me for a stmt about BH. Talked to srgt and came out that I was in PMO. Asked if I knew anything about AB, and I said no, so we talked about BH.

Martin (NDP): fair enough, we'll move on to influence of corporate lobbyists. Frequency and regularity of visits to PMO--you said some of these were not scheduled, you had Frank Moores...

Norman Spector: no, I was speaking about Fred Doucet.

Martin (NDP): did you see KHS?

Norman Spector: I met w/KHS. After I was handed the BH file, I met w/him to get his side of story. It was that which lead that...

Martin (NDP): what year?

Norman Spector: 1990

Martin (NDP): BM swore that in 1986 he had only passing acquaintances w/KHS. True?

Norman Spector: during those years, I had no knowledge of him dealing w/KHS, but after being handed BH file, I learned subsequent to 1996 that it certainly looks like BM had more than passing dealings with KHS

Mulcair (NDP): want to go back to your stmt about RCMP "botched the investigation" into AB matter. Are there things contained in Johnston's report--two surprising things in there. He talks about "well tilled ground" and quotes two books by Stevie Cameron, which is odd way of saying we don't need to investigate. Another thing concerns me a little, since the beg there's been vagueness in RCMP, it says Mr. S was questioned many times by RCMP. All of that was *after* settlement of AB. To your knowledge, dating back to 1995, did you speak to KHS? (????)

Norman Spector: the stmt that this is "well tilled ground" is absolutely incorrect. Might not be common knowledge, but know from Kaplan (book, Secret Trial) you can buy in bookstore (someone interrupts: "very hard to find!") Yes, [the book] was almost nipped in the bud by McGill press...

Mulcair (NDP): (laughing) like to have answer to my question...

Norman Spector: Sorry. You were speaking about the cash. The RCMP did NOT know about the cash when they said the investigation was over. Mr. Kaplan, if you meet him, he has impeccable sources...they did NOT know, they just had a rumour about it, which makes it even more extraordinary. They don't shut down murder investigations--they allow them to go cold, sure, but they don't shut them down. On question of whether they did/didn't, you'll have to ask RCMP themselves. I suspect people are playing games w/word "Airbus"--it's a contract but also an affair, involving many different scandals. This is an example of evasiveness

Mulcair (NDP): I'm the one who asked Mr. S whether the RCMP had spoken with him before the settlement to BM, but that's not what comes out of Johnson's report

Norman Spector: when RCMP interviewed me in 95, they were at the very beginning of their investigation. Just a feeling though, not based on fact.

Continue to Part III ("Brother, those ain't Girl Guides!") or return to Part I ("Don't let this become Frank Magazine").
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