Canada's kickback scandal grows

Canada's opposition parties are threatening to topple Prime Minister Paul Martin's reigning Liberal minority government, following allegations of kickbacks and money laundering.

For the past year, Canadians have been incensed by a scandal concerning the misuse of public funds by the Liberal Party to promote national unity with Quebec.

But late last week, anger exploded after the publication of statements by Jean Brault, an advertising executive at the center of the furor, who testified that his firm laundered millions in taxpayer revenues to help bolster Liberal Party coffers between 1997 and 2002.

The furor could present political rivals with their second chance to oust the Liberal Party, which lost its majority in Parliament in June 2004.

For Canadian citizens, however, the scandal cuts much deeper: It's a scar on the collective psyche of a nation that has entrusted its hopes and aspirations to one political party for the greater part of the last century.

A chastened Mr. Martin has implored opposition parties to let his government survive until all of the facts are known in what is clearly one of the biggest controversies in Canadian political history.

But so far, opposition parties have responded by quickly polling the electorate to gauge its openness to calling an election.

The most recent allegations exploded on the front pages across the country over the past weekend.

''Bombshell,'' read the headline in National Post. The Calgary Herald summed it up in six words: "Extortion. Kickbacks. Fraud. Shady Deals. Forgery."

Almost immediately, Conservative Leader Stephen Harper appeared to be testing election themes.

"Corruption is not a Canadian value,'' Mr. Harper told a rally on Ottawa's Parliament Hill, organized to oppose same- sex marriage. He later told supporters he expects to be prime minister following the next election.

A new poll shows the Liberal lead is sinking. An EKOS poll, commissioned by the Toronto Star, showed that 25 percent of Canadians now support the Liberal Party, while 36.2 percent support the Conservatives. It is the lowest showing for the Liberals since they resturned to power under Jean Chretien in 1993 after nine years of unprecedented rule by the Progressive Conservative Party, largely under leader Brian Mulroney.

The Liberal Party is clearly in damage control. "If there has been wrongdoing, those people will be made to pay, and trust us, Paul Martin will see to it that they pay in spades,'' the prime minister's spokesman Scott Reid said over the weekend.

In the meantime, local Conservative Party associations have been told to step up their election preparations. With a 99-member caucus, the Conservatives are the party that decides the fate of the Liberal minority government. The Liberals currently hold 135 seats of 308 in the House of Commons. The Conservatives have 99 seats.

Some political observers say that the sponsorship scandal, as it is known, may prove to be the death knell for Martin's Liberal government - a party which squandered what was expected to be a majority government less than a year ago as corruption charges first surfaced.

Allan Tupper, a political scientist at the University of British Columbia, says it's now getting difficult for the Liberal Party to explain away the charges.

"At first they said it was rogue civil servants, then a few bad apples in the party,'' Professor Tupper says. "Certainly Paul Martin must be distressed by all of these events, especially when he has difficulty pointing to a record of accomplishment."

At the very least, the scandal highlights the prime minister's own weaknesses, adds Stephen Clarkson, a political science professor at the University of Toronto.

''It's pretty impressive that he's made the switch from master politician into a man with such poor political judgment. What it means for him is impending disaster,'' Clarkson predicts.

Minority governments have traditionally lasted an average of 18 months.

The main decision to head to the polls will rest with the Tories, who will be paying particular attention to voter reaction in Ontario. The EKOS poll showed Conservatives leading the Liberals in the province by 40 percent to 33 percent. If the Conservative Party can pick up seats in the hotly contested, voter-rich province, Canadians can expect to be heading to the polls within several weeks. Canadian election campaigns must last for at least 36 days.

A full report in the public inquiry is expected this fall. So far, a judge has heard accounts of envelopes stuffed with cash and left on restaurant tables, as well as embellished contracts that were in turn used to bolster the Liberal Party's Quebec wing.