Political ethics and the lack of in the Liberal Party will be a good topic for students of Canadian politics for years to come. Could this be the beginning of the end of the Liberal dynasty?
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nationalpost.com
Voters should reject Chrétien after the BDC loan saga
'Poor judgment, reckless disregard for taxpayers'
Diane Francis
Financial Post
Prime Minister Jean Chrétien's behaviour has been appalling and he should be rejected by voters next week.
What every Canadian voter must realize is just how sleazy this bank scandal really is. This is the chronology:
1988: Jean Chrétien and two partners buy a golf course in Grand Mère, Que., for $1-million. They also pay $250,000 to buy the adjacent hotel's operation.
1993: Yvon Duhaime, a Shawinigan resident with an unsuccessful business track record, buys the hotel operation from the Prime Minister and his partners for $225,000. The price is questionable since the hotel operation has lost money since 1988 when the Prime Minister and his partners bought in. Mr. Duhaime pays the Prime Minister and his partner by obtaining a $225,000 government-backed (taxpayer-backed) small business loan. The local caisse populaire gives him the money.
Also in 1993, Mr. Chrétien (all his holdings were put into a blind trust after his 1993 election) sells his 25% interest in the golf course to a businessman named Jonas Prince for $300,000. Mr. Prince promises to make payments over three years but doesn't. Mr. Prince's price means that the golf course has a market value of $1.2-million. This is questionable since it already has $3-million in debts.
1994: In December, Mr. Duhaime buys the hotel building and acreage for another $225,000 by borrowing from the caisse populaire.
1996: Mr. Duhaime borrows more to build a banquet hall to be used by the hotel and golf course, spending more than $800,000. Cost overruns force the caisse populaire to threaten foreclosure. It's owed $890,000.
Early in 1996, Mr. Chrétien's deal with Mr. Prince falls through. He has never been paid the $300,000 for his 25% interest in the golf course. One of his former partners eventually buys Mr. Chrétien's 25% in October, 1999, or so the partner told newspapers.
That same year, Prime Minister Chrétien begins to make phone calls to the taxpayer-owned Business Development Bank of Canada's (BDC) president to support Mr. Duhaime's application to borrow money, even though the bank had already turned down a $2-million loan request by Mr. Duhaime.
1997: Another phone call to the BDC's president is made and the bank lends Mr. Duhaime $615,000 as a second mortgage. The labour-sponsored Solidarity Fund in Quebec kicks in another $615,000, also a second mortgage. Another $200,000 is advanced by two other "investment" funds, which use federal dollars. (One fund official is currently under investigation by the RCMP.) The caisse gets $65,000, cutting its exposure to $825,000 from $890,000.
Around the same time, the hotel gets $188,799 in federal job-creation grants.
Mr. Duhaime begins to spend $1.2-million, adding 24 rooms to the hotel for a total of 64 rooms.
1999: The hotel has $2.25-million in debts. The market value assessment for tax purposes puts the hotel's value at $1.98-million. It begins missing payments on loans. Former BDC president François Beaudoin suggests foreclosure and alleges, in a subsequent lawsuit, that as a result he's forced from his job.
2000: The Prime Minister admits he made the calls to the BDC president but said that there was nothing wrong with lobbying on behalf of a constituent. The Ethics Counsellor agrees and exonerates Mr. Chrétien this week.
Along the way, even though $2-million is borrowed or given, Mr. Duhaime has only invested $100,000 of his own money, raised by putting $50,000 mortgages on his house and also on his cottage. The hotel has racked up huge losses. It has missed interest payments on various mortgages. It is in arrears for its property taxes. It needs a new roof and the 44 older rooms need refurbishing.
What we have here, in a nutshell, is a constituent buying a failing hotel business from the prime minister with a loan backed by taxpayers. And ever since, he has stayed afloat thanks to another $1.04-million worth of tax dollars in the form of loans from BDC (a Crown corporation), various federal grants and federal-backed loans from other sources.
All of which means that our Prime Minister thought nothing of helping an unsuccessful businessman get our money. This displays poor judgment and a reckless disregard for taxpayers and also for the solvency of taxpayer-owned BDC.
This is why he should resign or be rejected by the voters of this country. |
