Canadian police charged two men at the center of a high-profile patronage scandal with fraud and conspiracy on Monday in connection with C$2 million (US$1.4 million) in government contracts.
Former civil servant Charles Guite and Groupaction advertising agency president Jean Brault pleaded not guilty during a brief court appearance in Montreal. They were released on bail.
Most of the charges are linked to a sponsorship scandal involving C$100 million in federal advertising contracts funneled to firms with close ties to the ruling Liberal Party.
The scandal was first detailed in a report by Auditor General Sheila Fraser in February. The report badly hurt the Liberal government, which was riding high in popularity polls and looked set to call an election for the spring, but saw its support sag from about 48 percent to 35 percent.
Prime Minister Paul Martin is expected to call a June 28 vote as public support for the Liberals has shown signs of rebounding, with recent polls placing them at 38 to 41 percent, with the Conservatives around 28 percent.
Opposition politicians said the timing of the arrests was questionable and suggested the move could be designed to boost Liberal chances at the polls.
"I think the timing of the charges ... is more than a little suspicious," Stephen Harper, leader of the official opposition Conservative Party, told reporters in Toronto. "We have the government in full pre-election mode ... and, conveniently, they can say [police] charged somebody."
But Public Works Minister Stephen Owen denied that election timing had anything to do with the arrests.
Both Guite and Brault face five charges of fraud and one of conspiracy to commit fraud. The charges carry a maximum sentence of 10 years in jail.
The fraud charges are related to three sponsorship contracts awarded to Groupaction. The pair are also accused of trying to defraud the government in connection with a gun-registry program.