The Fraser Institute has come out with a report throwing still more fuel onto the flaming Liberal Party corruption scandal-wagon. The suggestion is that the scope and spin-offs of the scandal are many times larger than either the Auditor-General reported or the Gomery Inquiry heard in testimony.
To which I’m not the least bit surprised. I suspect there’s far, far more than even this.
Accounting for Gomery: The Money Links Between the Federal Government, Political Parties, and Private Interests
Publication Date: July 2005
Publication Format: Digital Publications
Author(s):
Mark Mullins, Director of Ontario Policy Studies, The Fraser Institute
Email: [email protected]
Telephone: (416) 363-6575, ext. 225
Executive Summary: The numbers of people and amounts of money involved in the Gomery inquiry are larger than previously known. Problems with federal government sponsorship and advertising programs can be understood using an economic theory of incentives and institutional structure.This study finds that at least 565 organizations and individuals are identified in reports and testimony related to the Gomery inquiry. The original 2003 Auditor General sponsorship and advertising report cited only 71 organizations. The activities under investigation are therefore quite widespread.
The people identified in these reports and testimony are politicians and bureaucrats (government insiders), and political party members and business people (government outsiders). This paper finds that almost all of them have an exclusive financial link to the Liberal Party of Canada (hereafter referred to as the Liberal party). They donated at least 40 times more to the Liberal party than to all of the other main political parties combined from 1993 to 2003.
This paper finds that these individuals privately donated at least $3.9 million to the Liberal party and received at least $7.4 million in private payments from the Liberal party from 1993 to 2003. The Gomery inquiry forensic report found only $2.5 million in Liberal party donations.
The same people also received public (tax funded) payments from the federal government, and this was the underlying incentive that encouraged inappropriate behaviour and relationships. These incentives can be specifically identified:
- Government insiders benefited through salaries, staffing, budgets, and political influence accruing to senior ministers and bureaucrats from access to $120 million in public funding of the federal cabinet, and
- Nearly $1.2 billion in directed sponsorship and advertising contracts were awarded to government outsiders, generating at least $190 million in private benefits through outsider salaries, bonuses, and profits
The economic rent (or unearned financial benefits) captured by the government outsiders was almost 50 times larger than their political donations to the governing Liberal party. This cash incentive may have been the driving force that resulted in misdirected and wasted taxpayer funds.
There were also specific conflicts of interest involved in the financial relationships between the Liberal party and a number of organizations, including the RCMP, the Privy Council Office and the federal government’s two largest advertising firms, that have not yet been adequately reported on by the media.
The money links outlined here are significant underestimates of the underlying relationships.
PTBC was founded by Mr. Johannesen in 2000.
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