FAQs: Recovery of Funds

Investigative Phase

Q1. Why was the Special Counsel for Financial Recovery hired?

A1. The Special Counsel for Financial Recovery was hired to pursue all possible avenues to recover funds that may have been improperly received by certain parties involved in the delivery of the Sponsorship Program.

Q2. What was the Special Counsel’s mandate?

A2. On March 9, 2004, the Minister of Public Works and Government Services, released the terms of reference authorizing the Special Counsel for Financial Recovery to pursue all possible avenues to recover funds that may have been improperly received by certain parties involved in the delivery of the Sponsorship Program. Me André Gauthier’s mandate was to:

review the 721 sponsorship files and all other relevant documentation to determine whether the Crown made overpayments to communication agencies or any other party and the amount of the overpayment;
take action to recover any funds that may be payable to the Crown, if there is a reasonable chance of success;
be appointed counsel of record for the Crown in court proceedings already instituted and review the Gosselin file to determine if further recovery action is possible;
act for the Crown in any action taken against the Crown by communication agencies or other parties arising out of the sponsorship files;
advise the Government with respect to continuing to do business with firms named in the November 2003 Auditor General’s Report and in the development of criteria on which to base this decision;
advise the Government on what adaptations and modifications can be made to procedures, policies and to the Financial Administration Act to facilitate and strengthen financial recovery processes; and
perform such other duties related to the recovery of funds as the Attorney General may direct.

Q3. Why didn't the Government retain the services of Me Gauthier for the litigation phase of the civil claim?

A3. Me Gauthier’s mandate was to pursue all possible avenues to recover funds that were improperly received by certain parties involved in the delivery of the now cancelled Sponsorship Program. He completed his work by filing the civil suit against a number of individuals and companies in Quebec Superior Court in March 2005.

Q4. How much did the services of the Special Counsel cost?

A4. The Government paid $1.9M for the services rendered by Me Gauthier between February 2004 and April 2005. This represents the total and final amount paid by the Government for the Special Counsel for Financial Recovery’s services.

Litigation Phase

Q1. Who is leading the litigation phase of the recovery of funds?

A1. In April 2005, the Government of Canada retained the services of Me Sylvain Lussier to manage the litigation phase. Me Lussier, as the Agent of the Attorney General for the Recovery of Funds, is assisted by a legal team from the Department of Justice and by experts such as forensic accountants.

Q2. What is Me Lussier’s mandate?

A2. His mandate is to:

pursue the recovery of funds improperly received under the Sponsorship Program;
litigate the Attorney General of Canada's lawsuit to recover sponsorship funds;
act for the Attorney General of Canada in lawsuits brought by communication agencies from which the Attorney General of Canada is attempting to recover funds;
explore avenues to recover funds from the defendants prior to trial; and
add to the claim or initiate appropriate action in due course, if new evidence supports action against individuals or organizations.

Q3. How much will the litigation cost? Is it worth trying to recover $62M when the litigation costs so much?

A3 . As of May 26, 2006, the litigation costs for Me Lussier, the Agent of the Attorney General for the Recovery of Funds, is $665K. Future costs will depend on the Court proceedings.

It is important for the Government to show Canadians it is accountable and recover the funds obtained through fraud.

Q4 Why is the litigation process taking so long?

A4. This is a complex civil claim involving many parties. It therefore takes time to ensure that the claim accurately identifies the amounts claimed against the various defendants, both individually and jointly with all other defendants. The Government is following the rules and the timetable set by the Judge who is overseeing the preparation of the Claim for trial.

Claim for the Recovery of Funds

Q1. In the initial Claim filed on March 11, 2005, how many companies did the Government file against and for how much?

A1. On March 11, 2005, the Government of Canada filed a claim in Quebec Superior Court against 19 defendants (11 firms and 8 individuals) for $40.8M.

Q2. Why has the Claim for the Recovery of Funds been amended?

A2. The original claim filed on March 11, 2005 to recover $40.8 million from 19 defendants has been amended three times. (September 30, 2005, November 1, 2005 and May 26, 2006)

The claims were amended to: refine the amounts previously claimed; remove claims that have been settled with defendants; to add new defendants and to add new amounts claimed from some of the original defendants.

As a result of these amendments, the government is now claiming a revised total amount of $62M against 28 defendants (16 firms and 12 individuals). This does not include the $1.6M that has been recovered from Coffin, Coffin Communications and OSL, the $1M that has been addressed through an agreement with Draft/Media IDA and the $1.1M remitted by Liberal Party of Canada.

Q3. How much money did the Liberal Party of Canada return to the Government?

A3. On November 1, 2005, the Liberal Party of Canada remitted $1.1M to the Government of Canada as a result of the findings of the Gomery Report.

Settlement Agreements

Q4. Are all settlement agreements considered to be final?

A4. Yes, all settlement agreements are considered final. However, if new evidence comes to light for a different period of time that would support filing additional claims, the Government would study it fully and act accordingly.

Q5. Where can we obtain a copy of the legal documents pertaining to the settlement agreements?

A5. The Transaction Agreements are posted on the PWGSC website. The Declaration of Settlement Out of Court can be examined and copied in the office of the Quebec Superior Court (the records/registry office).

Q6. How much did the Government originally claim for against Communication Coffin? How much did the Government settle for?

A6. On March 11, 2005, the Government of Canada originally filed a claim against Communication Coffin and Mr. Paul Coffin for $1.9M. With Mr. Coffin’s concurrence, the evidence relating to the 18 charges of fraud against him was examined. The GoC subsequently concluded that an amount closer to $1.6M could legitimately be claimed.

The Government of Canada is satisfied that full payment of $1.6M has been received through a combination of: $1M cash payment by Paul Coffin; his previously paid federal income tax and the money which the government had already held back from Communication Coffin.

Q7. How much did the Government recover from Groupe OSL Inc.?

A7. The Claim for the Recovery of Funds filed by the Government against 19 defendants (firms and individuals) on March 11, 2005, included a joint claim against Publicité Martin and Jacques Paradis, for $98K.

The Government reached an out-of-court settlement with Groupe OSL Inc., the current owners of Publicité Martin, whereby it recovered $50K. The Government has no complaints with the work of Groupe OSL Inc. and will continue to do business with this company.

The Government of Canada will continue to pursue its claim against Jacques Paradis for the remainder of the funds improperly claimed ($48K).

Q8. How much did the Government originally claim for against Draft Inc. and Media IDA Vision? How much did the Government settle for?

A8. The Government has reached an out-of-court settlement with Draft Inc./Media I.D.A. Vision Inc. - each party has agreed to discontinue its claim against the other. The Government is satisfied that this out-of-court settlement addresses the recovery of sponsorship funds ($1M) it claims should not have been received by Draft Inc./Media I.D.A. Vision Inc.

Q9. What is the total amount that the Government is now seeking to recover following the amendment to its claim?

A9. The Government is seeking to recover $62M from 28 defendants (16 firms and 12 individuals) in funds improperly received through the now cancelled Sponsorship Program.

Q10. Is this claim considered to be the final claim?

A10. If the Government finds new evidence to support amending the Claim for the Recovery of Funds, it can amend its Claim provided that it obtains permission from the Quebec Superior Court Judge who is overseeing the preparation of the Claim for trial.

Q11. Against which companies and/or individuals is the Government filing suit and how much money is the Government seeking to recover from each?

A11. Because the same claims are made against more than one defendant, it is difficult to provide an amount by defendant. The table below provides the list of defendants:

Defendants	Date of Claim	Status
Groupaction Marketing Inc.	March 11, 2005
Jean Brault	March 11, 2005
2794101 Canada Inc. (faisant affaires sous la raison sociale Communication Coffin)	March 11, 2005	Settled – Aug. 11, 2005 ($1.6M)
Paul Coffin	March 11, 2005	Settled – Aug. 11, 2005 (Refer to 2794101 Canada Inc.)
Jean-Charles Guité	March 11, 2005
Malcom Média Inc. (Expour 2000)	March 11, 2005
Le Groupe Polygone Éditeurs Inc.	March 11, 2005
Luc Lemay	March 11, 2005
Publicité Martin Inc.	March 11, 2005	Settled – Sept. 2, 2005 ($50K)
Jacques Paradis	March 11, 2005
Gestion Opération Tibet Inc. (Groupe Everest)	March 11, 2005
Claude Boulay	March 11, 2005
Gosselin Communications Stratégiques Inc.	March 11, 2005
Gosselin Relations Publiques	March 11, 2005
Gilles André Gosselin	March 11, 2005
Jean Lafleur Communications Marketing Inc.	March 11, 2005
Jean Lafleur	March 11, 2005
Media I.D.A. Vision Inc.	March 11, 2005	Settled – Sept. 2006 ($1M)
Draft Inc.	March 11, 2005	Settled – Sept. 2006 ($1M)
Publicité Dézert Inc.	November 1, 2005
Eric Lafleur	November 1, 2005
Pluridesign Canada Inc.	November 1, 2005
Jacques Corriveau	November 1, 2005
Andrée Côté Gosselin	November 1, 2005
CPPC - Centre de Placement de Professionnels en Communication Inc.	November 1, 2005
Communications Art Tellier Inc.	November 1, 2005
Benoît Renaud	November 1, 2005
Sensas (G.E.C.M.) Inc.	November 1, 2005
Everest Estrie Publicité (G.E.C.M.) Inc.	November 1, 2005
Everest Commandites (G.E.C.M.) Inc.	November 1, 2005
Everest Publicité Promotions (G.E.C.M.) Inc.	November 1, 2005

Q12. What will happen to any funds that may be recovered as a result of the Claim for the Recovery of Funds?

A12. Any cheques or payments would be made out to the Receiver General for Canada and deposited in the federal government’s Consolidated Revenue Fund.

Q13. Where can we obtain a copy of the Claim (original and amendment)?

A13. You can obtain a copy of the Statement of Claim at the Superior Court of Quebec in Montreal located at the Palais de justice, 1 Notre Dame East, Montreal, P.Q.

The Statement of Claim and amendments are also posted on the PWGSC Internet site (URL address) once translation is completed.

Q14. What is the difference between the Claim for the Recovery of Funds (civil claim) and the criminal cases?

A14. The Attorney General of Canada brought the civil case before the Quebec Superior Court in order to recover funds that have been improperly paid to various firms and individuals.

The criminal cases were brought by the Quebec Attorney General, following criminal investigation, alleging that some individuals had committed fraud according to the Criminal Code of Canada.

Decisions with regards to prosecution of criminal cases are within the jurisdiction of provincial authorities.

Q15. What other actions have been taken by the Government to safeguard taxpayers’ money?

A15. To safeguard taxpayers, the Government of Canada is holding back money from a number of communications agencies.

Also, where the Government has been sued, it has counterclaimed where appropriate.