Government of Canada Announces First Success in Agreement to Recover Sponsorship Funds

For immediate release

OTTAWA, August 16, 2005 -- The Government of Canada today announced an agreement with Paul Coffin and Communication Coffin for the recovery of funds that were improperly received from the now cancelled Sponsorship Program.

The lawyers for Mr. Coffin have now delivered a cheque to reimburse the Receiver General for Canada, in the amount of $1 million.

The Government of Canada had determined that the amount improperly received had actually been $1.6 million but some of this amount had been paid in federal income taxes and had been part of the money that the government had withheld from several communications agencies.

"The Government of Canada is committed to taking all necessary steps to ensure the safeguard of Canadians 'hard-earned money', said Scott Brison, Minister of Public Works and Government Services. "This includes ensuring funds improperly obtained from the Government of Canada are recovered."

Mr. Coffin and Communication Coffin are two of the 19 defendants the Government of Canada named in its claim for recovery of sponsorship funds, filed before the Quebec Superior Court on March 11, 2005.

Mr. Coffin has pleaded guilty to 15 out of 18 charges and is scheduled to appear in Quebec criminal court today for a sentencing hearing. The three other charges were dropped.

"This agreement is a direct result of the dedication of the federal government to recover sponsorship funds, and I am confident that it will pave the way for more positive results, " added Minister Brison.

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For updates on any developments concerning the status of the financial recovery, consult the PWGSC web site at:
http://www.tpsgc-pwgsc.gc.ca/sponsorship/text/2005-08-recovery-e.html

For more information, media may contact:

Renée David
Press Secretary
Office of Minister Brison
(819) 997-5421

Mario Baril
PWGSC Manager
Media Relations
(819) 956-2315

Background Information

As with any other negotiation where the Government is involved in attempting to recover funds, settlement is based on both parties agreeing to a mutually acceptable amount based on a number of factors, including the payment of federal income tax on the original amount and funds previously held back by the Government.

On March 11, 2005, the Government of Canada had originally filed a claim against Communication Coffin and Paul Coffin for $1.9 million. However, the Government of Canada subsequently concluded that the Mr. Coffin received $1.6 million through his company Communication Coffin during the time period from April 1,1997 to December 31, 2001. Communication Coffin and Mr. Coffin have already paid federal income tax on these funds, even though they had been improperly obtained. As a result of a consent signed by Mr. Coffin, the Government of Canada has confirmed that taxes were paid. It is important to recognize that, as a matter of principle, the government does not wish to claim more than it is owed.

Me Sylvain Lussier is the Crown's Agent working on recovery of funds against the following firms and individuals named in the Government of Canada's Statement of Claim, filed on March 11, 2005:

• Groupaction Marketing Inc.
• Jean Brault
• 2794101 Canada Inc. (doing business under Communication Coffin)
• Paul Coffin
• Jean-Charles Guité
• Malcom Média Inc. (Expour 2000)
• Le Groupe Polygone Éditeurs Inc.
• Luc Lemay
• Publicité Martin Inc.
• Jacques Paradis
• Gestion Opération Tibet Inc. (Groupe Everest)
• Claude Boulay
• Gosselin Communications Stratégiques Inc.
• Gosselin Relations Publiques
• Gilles André Gosselin
• Jean Lafleur Communications Marketing Inc.
• Jean Lafleur
• Media I.D.A. Vision Inc.
• Draft Inc.

The Quebec Superior Court adopted a tentative timeline for the conduct of this litigation and referred it to the judge who was appointed to manage the progress of this litigation. However, this does not mean that the government can't make additional amendments to the claim beyond that date.

A copy of the Statement of Claim can be obtained from the Superior Court of Quebec in Montreal located at the Palais de justice, 1 Notre Dame East, Montreal, P.Q.