G8 spending in Clement's riding left 'no paper trail'

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Senior Conservative officials broke federal rules to shower $50-million on the riding of the minister now overseeing Ottawa's austerity plan, according to the final audit of a G8 program that fuelled opposition charges of pork-barrel politics.

In her last report, Auditor-General Sheila Fraser said the funding for the G8 Legacy Infrastructure Fund was approved by Parliament under the guise of a border initiative. The money was then distributed to projects in the riding of Treasury Board President Tony Clement without any input from civil servants, in a clear breach of federal policies dealing with transparency and accountability.

"It is very unusual and troubling. There is no paper trail behind the selection of the 32 projects," said John Wiersema, the interim Auditor-General who recently took over from a retired Ms. Fraser. "I, personally, in my career in auditing, have not encountered a situation like that."

Mr. Clement showed up at a news conference to defend the spending in his riding, but Foreign Affairs Minister John Baird physically shielded him from questions at times. The two stood behind a podium and single microphone, and Mr. Baird, who was in charge of Ottawa's infrastructure program when the spending was approved, often fielded questions the media directed at Mr. Clement.

The pair took the Auditor-General's criticism on the chin, promising to improve "anachronistic" rules and regulations that were used by civil servants to get the spending quickly approved through Parliament in a period of economic downturn.

"The Auditor-General is raising some concerns, we agree with recommendations to do a better job going forward," Mr. Baird said.

Mr. Clement insisted that not a penny went missing and that the projects were all completed to the benefit of the Muskoka region, although he acknowledged the paperwork "could have been better."

He also kept a low profile in the House of Commons, allowing Mr. Baird to answer on his behalf as the NDP and Liberals blasted the government with accusations of old-time politics.

The report provides embarrassing ammunition to Mr. Clement's critics, who noted that his main task at the moment is to find wasteful spending as part of efforts to bring down the annual federal budget by $4-billion.

"That's rich," said NDP deputy leader Thomas Mulcair. "When we see that he's the most wasteful spender in the history of the Canadian government since the sponsorship scandal."

NDP MP Charlie Angus called the program a "slush fund for pork-barrel projects" in Mr. Clement's riding.

As the government started seeking approval for the fund in Parliament in 2009, it buried the initiative in a larger $83-million item identified as the "Border Infrastructure Fund." As such, when Parliament approved the funding, "the request only indicated that money was to be used to reduce border congestion," the Auditor-General's report said.

Asked to explain his decision-making process, Mr. Clement said that the 32 projects were selected by local mayors, who had initially proposed 242 projects, and then forwarded to Mr. Baird's department.

At a news conference, Liberal Leader Bob Rae said the initiative was a "monument to waste." Mr. Rae said that in an era of fiscal restraint, the government ignored all rules and procedures as it dispensed funds in Mr. Clement's riding. "They just basically go in a backroom and cut up the funds," Mr. Rae said.

Two distinct drafts of the report on the G8 Legacy Infrastructure Fund were leaked during the last election campaign. The final report is tamer and less critical than the first version of the audit, which was provided to The Canadian Press. For example, the final report does not go into the fact Mr. Clement was personally involved in approving funding proposals with local mayors.

In addition, the harshest language in the first draft - that the government "misinformed" Parliament and that obtaining approval for funds under the guise of a border initiative might have been illegal - did not make it into either the second draft that was circulated inside government, nor the final version.

Mr. Wiersema said the final version is the only one that counts. He added the audit found no evidence the government deliberately misled Parliament. "The evidence that we saw suggests that this was done for a matter of expediency," he said.

In a separate report, the Auditor-General looked at the overall financial management of the G8 and G20 summits, stating Parliament was ill-informed as it approved $1.1-billion in funding. The Auditor-General said that final expenses came in at nearly half of the amount, or $664-million.

"Because of the short time frame to prepare for the summits, departments had to prepare budgets quickly, often with limited information," Mr. Wiersema said. "As a result, the funding requests significantly overestimated the amounts needed."