By JEFF GRAY
Globe and Mail Update
The federal government's ethics counsellor says Jean Chrétien was only doing his job as an MP when he called the head of a Crown-owned bank to help secure a loan for an old friend, clearing the Prime Minister of any wrongdoing.
Mr. Chrétien said he welcomed the ruling, which he said cleared him of "the malicious and unfounded charges that have been directed at me in this election."
But a Canadian Alliance spokesman put little faith in ethics counsellor Howard Wilson's independence. Mr. Wilson was appointed by Mr. Chrétien, and reports to the Prime Minister.
"With this ruling it's become more evident that we need an ethics watchdog, not an ethics lap dog," Phil von Finckenstein of the Alliance said.
Mr. Wilson was asked to look into the matter by Canadian Alliance Leader Stockwell Day and Progressive Conservative Leader Joe Clark, who accused the Liberal Leader of conflict of interest when he phoned the president of the Business Development Bank of Canada about a loan for a hotel in his Quebec riding of Saint-Maurice.
"The prime minister, in calling the president of the BDC, did not violate any rule which has been established by the Canadian government in terms of ministers dealing on behalf of constituents with government agencies," Mr. Wilson wrote in his letters to the two opposition leaders Tuesday.
Mr. Clark and Mr. Day asked Mr. Wilson to re-examine the matter last week, and have used the issue repeatedly to attack Mr. Chrétien on the campaign trail.
Mr. Chrétien accused Mr. Day and Mr. Clark of overstepping "the accepted bounds of fairness and decency which have been our tradition in Canadian elections."
"Instead, they have sought to destroy my reputation, and, in so doing, have demeaned the political process," Mr. Chrétien said Tuesday.
Mr. Day, speaking in Cambridge, Ont., Tuesday evening, said that as Alliance Leader, it was his responsibility to ask questions of Mr. Chrétien concerning his actions.
"The office of the Prime Minister is one that should be respected," Mr. Day said.
He said that if the party formed government after the Nov. 27 elections, it would make changes to how the ethics counsellor is appointed — making the person report to Parliament rather than to the Prime Minister.
The ethics counsellor should be someone who is hired by an all-party group, he said, not the Prime Minister.
Last Sunday, Mr. Day wrote to Justice Minister Ann McLellan, asking that she start a criminal investigation.
Ms. McLellan responded Tuesday by saying she cannot.
"As you should be aware, the attorney general of Canada has no authority to direct police to launch an investigation," she wrote to Mr. Day.
Mr. Wilson had previously investigated the matter at the request of NDP MP Lorne Nystrom in 1999. But that probe only addressed whether it was appropriate for an aide to the Prime Minister to attend a meeting where the loan was discussed — not actual phone calls from Mr. Chrétien.
But Mr. Wilson said Tuesday that the personal involvement of the Prime Minister, which he had only learned about through the media recently, does not change the essence of his earlier ruling.
Mr. Wilson stood by his 1999 conclusions, saying nothing forbids members of Parliament from contacting the heads of Crown corporations on behalf of constituents. And he refuted allegations that Mr. Chrétien has interfered for his own financial gain.
In 1996 and 1997, Mr. Chrétien contacted the head of the Business Development Bank of Canada, François Beaudoin, to make a case for a hotel owner in his riding who had problems securing a mortgage. The bank later approved a $615,000 loan to Yvon Duhaime, owner of the Auberge Grand-Mère. Mr. Duhaime, a well-known Liberal, is a friend of Mr. Chrétien's, with whom he had done business before.
Mr. Chrétien and his partners sold Mr. Duhaime the hotel in question in 1993, before the federal election that brought the Liberals to power. "They were paid in full," Mr. Wilson wrote.
The allegations that Mr. Chrétien stood to gain in the granting of the loan to Mr. Duhaime centred on the fact that Mr. Chrétien owned an interest in a golf course next to the hotel. But Mr. Wilson said that when Mr. Chrétien intervened with the bank on Mr. Duhaime's behalf, he had sold his interest in the golf course to another person.
"Therefore, I conclude that the Prime Minister had no personal financial interest in play when he communicated in 1996-1997 with the BDC on behalf of Mr. Duhaime," Mr. Wilson wrote Tuesday.
Mr. Wilson said that when regular MPs become minister of the Crown, their obligations to their constituents do not change, although their are limit that apply the cabinet members that do not apply back-benchers. They are not allowed to intervene with any judicial or quasi-judicial body — which the BDC is not.
With a report from Allison Dunfield and Canadian Press