Mon, Feb 16, 2004 - Page 6 News List

Kickback scandal grips Canada

DUBIOUS Opposition parties received ammunition to take on the new prime minister, Paul Martin, after the auditor-general documented a US$75 million boondoggle

NY TIMES NEWS SERVICE , TORONTO

"This frankly was a money laundering scheme," said Grant Hill, the Conservative Party leader. "The Liberal Party of Canada, quite frankly, is implicated in this right up to their eyeballs."

By Thursday, Martin had sharpened his message and indicated that he intended to take responsibility for cleaning up what he called "the disregard for public funds" and "the willful breaking of the rules and law" by officials in government.

"I am sick and deeply, deeply troubled about what happened," he added. "Heads will roll."

His supporters have been quick to note that he canceled the sponsorship program as soon as he took office in December.

But a February 2002 letter published Friday on the front page of The National Post, from a senior Liberal policy official to Martin when he was still finance minister, suggested that he had reason to know at least two years ago that something had gone awry in the program.

The letter reported "growing rumors that funds from the sponsorship program are being diverted" and that the issue threatened to "become a creeping miasma over the party."

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