Insider Denounces Gagliano

EXCLUSIVE: Appalled by what he saw at Public Works Canada, a respected
corporate veteran steps forward to accuse the embattled minister of meddling
and patronage


By DANIEL LEBLANC
Wednesday, January 9, 2002 Page A1

OTTAWA -- Public Works Minister
Alfonso Gagliano and members of his staff repeatedly tried to obtain jobs
for friends and sway the commercial dealings of Canada Lands Co., the
former chairman of the agency has told The Globe and Mail.

Jon Grant, a veteran of private-sector boardrooms and the current
chairman of Laurentian Bank of Canada, said he was appalled by the
political interference he witnessed during his six years at the Crown
corporation.

While allegations of patronage have been swirling around Mr. Gagliano for
years, Mr. Grant is the first person from the inside to denounce publicly the
practices at Public Works.

Mr. Grant, 66, said he felt compelled to speak out after reading comments
by Mr. Gagliano in an interview with The Globe last month. In it, Mr.
Gagliano asserted that he did not play any role in the 1999 hiring by
Canada Lands of one of his friends and organizers, Tony Mignacca.

But Mr. Grant said he was asked directly to make the hiring by Mr.
Gagliano, the minister responsible for Crown corporations.

"The minister asked me to hire him," Mr. Grant insisted. "He said [Mr.
Mignacca] was out of a job."

Mr. Mignacca's contract with Canada Lands was terminated early and he
has since found work in Mr. Gagliano's riding office.

In addition, Mr. Grant said Mr. Gagliano's chief of staff, Jean-Marc Bard,
asked to be directly involved in Canada Lands deals in Quebec. Mr.
Gagliano is the government's regional minister and the Liberal Party's top
organizer in the province.

"As Jean-Marc [Bard] said to me very clearly, 'The rest of Canada is
yours, Quebec is ours,' " Mr. Grant recalled.

Mr. Bard and Mr. Gagliano's communications director did not return
telephone calls yesterday.

Mr. Grant also said he had to fight attempts by officials in Mr. Gagliano's
office to improperly influence commercial dealings of Canada Lands,
which was created to sell off excess federal property.

"I didn't let them happen," he said. "I resisted all that, so I wasn't very
popular."

Mr. Gagliano's organization seemed to be run like ministerial offices in
Russia or Ukraine, said Mr. Grant, who did business in those places when
he headed Quaker Oats Co. of Canada Ltd.

He said Mr. Gagliano has surrounded himself with "political operatives"
and "hangers-on" who directly call civil servants to try to shape their
decisions.

"I didn't expect to see this in a democratic society," Mr. Grant said.

He retired after his second three-year term as chairman of the board of
Canada Lands in November of 2001. The position had been offered to
him by the Liberal government when it created the agency in 1995.

Mr. Gagliano, a long-time loyalist of Prime Minister Jean Chrétien, has
been on the hot seat over contracts awarded by his department to Liberal
supporters.

Mr. Gagliano has always denied wrongdoing or interference. He has
insisted that he never got involved in the internal affairs of Crown
corporations, which are supposed to operate at arm's length from the
government.

"I don't give contracts to my friends," Mr. Gagliano said last month.

Speaking in the House two months ago, Mr. Gagliano said, "Crown
corporations manage their own affairs and ministers do not get involved in
giving contracts."

Regarding his friend Mr. Mignacca, Mr. Gagliano told The Globe that
Canada Lands hired him because "they thought that maybe they could get
closer to the minister."

Mr. Grant called that ludicrous.

"It is an insult to Canada Lands, its board and staff that Minister Gagliano,
in a recent interview, accused the company of hiring one of his friends to
buy access to the minister," Mr. Grant said.

Mr. Grant praised the work of the Crown corporation, which returned
hundreds of millions of dollars in profits to the government during his
tenure.

"Minister Gagliano and his political staff shouldn't go after Canada Lands
-- it's not a good move," he said.

Mr. Grant added that Canada Lands was asked by Mr. Gagliano's office
to hire Michèle Tremblay, another one of Mr. Gagliano's friends and
supporters, for $5,000 a month to write speeches and provide access to
the minister.

Mr. Grant said he wasn't happy with that deal.

"We took her on for a while, we got nothing in return, and so I let her go,"
he said.

Mr. Grant said that he never had any problems in his dealings with other
regional ministers such as David Collenette and David Anderson.

Mr. Grant said he raised his concerns with the government's ethics
counsellor, Howard Wilson, but that Mr. Wilson told him not to worry
about overeager staffers.

In an interview yesterday, Mr. Wilson said his office looked into a
complaint of "undue influence from the minister's office" involving Canada
Lands last year. Mr. Wilson said he concluded there was nothing to it after
discussions with staff in Mr. Gagliano's riding office and Mr. Gagliano's
chief of staff, Mr. Bard.

"It was based on a misunderstanding," Mr. Wilson said.

Mr. Grant said that political interference brought down morale at Canada
Lands.

"We didn't get any support but we got a lot of criticism, which is not really
helpful when you're trying to run a business," he said.

Reprinted from Toronto Globe and Mail