The Ottawa Citizen
May 16, 2000
Lavelle’s connection to companies doesn’t ‘smell good,’ Alliance says
The chairman of the Export Development Corporation is free of any conflicts of interest in connection with other corporate boards he sits on — even though they do business worth millions with the Crown corporation, Deputy Prime Minister Herb Gray says.
Members of the official Opposition made EDC chairman Patrick Lavelle the focus of their opening queries yesterday in question period. A long-time Liberal and self-confessed patronage appointee, Mr. Lavelle is a personal friend and political confidant of Prime Minister Jean Chretien.
Calling questions on Mr. Lavelle “unwarranted assertions,” Mr. Gray said Mr. Lavelle complies with the EDC’s code of ethics, which was brought in after he was made chair.
“Part-time board members are not subject to the compliance measures of the conflict of interest code, but they are fully subject to its principles,” he added.
The answer did not satisfy Canadian Alliance acting leader Deborah Grey.
“I do not think Canadians who are forking out cash are really pleased with that answer. He talks about a part-time chairman — too bad they were not just giving out part-time cash,” said Ms. Grey.
She said she found it “amazing” that Mr. Lavelle also sits on the boards of — and has stock options in — the Canadian Bank Note Company and Slater Steel, which have benefited from “millions of dollars in assistance from the EDC.”
“I do not think that it looks good or smells good for the government and the minister knows it,” said Ms. Grey.
The deputy prime minister said that the EDC board has never considered a matter related to any of the corporations Mr. Lavelle is linked with through board memberships.
“I repeat, the board of directors does not deal with any matters which Mr. Lavelle has an interest in. My honourable friend is wrong. If anything smells, it is my honourable friend’s question,” said Mr. Gray.
The EDC approved a multi-million-dollar deal to help the government of Latvia finance the purchase of passport-issuing systems with Canadian Bank Note as the supplier. And the Crown corporation recently paid out $3.5 million on a credit insurance claim for Canadian Bank Note after failed payments from a deal in India.
Mr. Lavelle has told the Citizen that he was not involved in the decisions involving Canadian Bank Note, since they fell under the $20-million threshold for financial deals to be reviewed by the EDC board of directors.
Canadian Alliance House leader Chuck Strahl said that EDC bureaucrats are being influenced by Mr. Lavelle’s board memberships.
“He does not have to sit on the board, he just has to put his name on the letterhead and it seems to go to the right place,” Mr. Strahl told the House.
Mr. Gray challenged Mr. Strahl “to put facts on the table in the House and outside the House” that indicate Mr. Lavelle was personally involved in the deals.