PUBLICATION:              Toronto Star

DATE:                         2004.05.11

SECTION:                  News

PAGE:                         A08

SOURCE:                   Toronto Star; Canadian Press

BYLINE:                     Tonda MacCharles

DATELINE:                 OTTAWA

ILLUSTRATION:             Auditor-General Sheila Fraser reported on firearms programin 2002. Anne McLellan says fraud charges not tied to gun registry. 

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Mystery contract subject of charges

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The federal firearms office said yesterday it had "no knowledge and no records" of a mystery $150,000 "firearms" communications contract that is the subject of fraud charges against sponsorship program head Chuck Guite and Montreal ad executive Jean Brault.

It is the second suspicious sponsorship contract to be tied to the controversial gun control program. Another $330,000 advertising contract - previously criticized by the federal auditor-general - is also the subject of fraud charges laid yesterday.

"We, at the firearms program, have no knowledge of this contract or any record that it even originated from the firearms program. So we at this point know nothing about it," said Thomas Vares, a spokesman for the Canadian Firearms Centre.

No one in the federal government could, or would, provide details yesterday on the contract, except to say it is listed on the government's Web site index of sponsorship contracts for 1997-1998 simply as a $150,000 "firearms" contract.

A 2002 public works report concluded "no report or post-mortem" was ever found in the government's files in connection with the $150,000 contract, reports.

"It has nothing to do with the operation of the gun control program," Public Safety Minister Anne McLellan, who is politically responsible for gun control, told reporters yesterday.

"This has nothing to do as far as I know with the implementation and running of the gun control program, either licensing or registration."

The RCMP, in announcing six counts of fraud and conspiracy to commit fraud against Guite and Brault, allege the two men "defrauded the federal government for $150,000 within the ambit of a contract with respect to the surveillance of interest groups and with respect to the registration of firearms."

The Mounties have also charged the pair in connection with another $330,000 firearms advertising contract, which the police called bogus and which was criticized by Auditor-General Sheila Fraser.

The other charges yesterday relate to three contracts awarded to Brault's firm, Groupaction Marketing, from 1996 to 1999.

Fraser's office reported on audits of the firearms program in December, 2002, questionable Groupaction contracts in May, 2002, and on the whole sponsorship and advertising program this past February. In her latest report, Fraser said that in December, 1996, the branch that Guite then ran - the advertising and public opinion research sector (APORS) - signed a $330,000 contract with Groupaction to develop a communications strategy related to the new firearms legislation.

Fraser said Guite's office "received invoices for the full amount of the contract and approved the payments. However, there was no evidence that APORS received anything for the money it paid to Groupaction under this contract."

Fraser also criticized advertising work the department was clearly aware of, saying justice officials failed to competitively tender subcontracted work.

She cited a $1.9 million contract managed by justice department officials in 2000 that went to Groupaction.

"Groupaction turned around and subcontracted work valued at $355,999 to Alleluia Design without submitting evidence that it had obtained three bids," said Fraser.

"Of particular concern is that Groupaction was affiliated with Alleluia. Groupaction and Alleluia Design invoices showed the same phone number and the same departmental reference number, yet the department did not question the companies' relationship and approved the payment of a 17.65 per cent commission."