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Government Mismanagement: Minister Besieged

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Government Mismanagement: Minister Besieged Contents Government Mismanagement: Minister Besieged An audit of the federal job-creation grant program reveals what has been described at best as sloppy bookkeeping. As the current Minister for the Department of Human Resources, Jane Stewart must defend not only her own political reputation but that of the entire Liberal government. This story reveals how ministers of the Crown become especially accountable to the general public, the media, and opposition forces whether or not they personally are responsible for perceived errors or mismanagement. This aspect of political noblesse oblige and the parliamentary tradition of not holding a minister responsible for policy and practices once he or she has left a particular portfolio highlight the degree of responsibility that elected government officials must assume in order that the integrity of the democratic process be protected. Introduction Allegations and Accountability Her Majestys Loyal Opposition Whos Responsible? The Patronage Issue Ghosts and Skeletons Creating Employment Discussion, Research, and Essay Questions Comprehensive News in Review Study Modules Using both the print and non-print material from various issues of News in Review, teachers and students can create comprehensive, thematic modules that are excellent for research purposes, independent assignments, and small group study. We recommend the stories indicated below for the universal issues they represent and for the archival and historic material they contain. Cigarette Smuggling: Beating the Tax, November 1993 Medicare: The Cost of Caring, November 1993 Overdrawn: Understanding the Deficit, December 1994 Other Related Videos Available from CBC Learning Does Your Resource Collection Include These CBC Videos? Spin Cycle Introduction Government Mismanagement: Minister Besieged In his first public comment on the way the current federal government has managed its money, Auditor General Denis Desautels delivered this message to the House of Commons Committee on Human Resources on March 23, 2000: This is an unacceptable way, in my opinion, to spend public funds. Large amounts of public funds were spent without the appropriate controls, making it difficult to know whether the funds were used as intended, spent wisely, and produced desired results. Desautels was referring to the scandal that erupted four days earlier following the release of an internal audit detailing large- scale mismanagement of money in the Ministry of Human Resources, specifically from a fund called the Transitional Jobs Fund. In the ensuing outcry, Jane Stewart, the minister in charge of this portfolio, was, on behalf of herself, her department, and the government, the target of relentless questioning from media and accusations of incompetence and misconduct by the opposition parties. At the time of this writing, she has thus far withstood the intense public scrutiny and relentless demands for her resignation. The scandal, however, is not going away; an investigation by the Auditor General is expected to be completed by October 2000. The allegations are very embarrassing for the Chrétien government. During their two terms in power, the Liberals have carefully cultivated an image as sound financial managers who eliminated the deficit and returned Canada to fiscal health. The original mandate of the program in question, the Transitional Jobs Fund, was clear and understandable: to assist communities in dealing with the tighter restrictions imposed on Employment Insurance by the Liberals. The $300-million of funding was to be given for worthy projects in ridings with unemployment rates above 10 percent. Made permanent under the name The Canada Jobs Fund in 1999; the fund s annual budget has been set at $110-million. The principal criticism of the funds management is what critics have called sloppy accounting; the majority of the applicants for the jobs grants were private companies, but few checks were made to determine the viability of their business plans. As well, according to critics, the follow-up assessment of the grants was either poorly done or non-existent. The projects ranged from educational programs and the establishment of textile factories to cultural events such as the Groundhog Day festival. Many of the programs, however, are generally considered to be excellent ones that do indeed create jobs. But as the Auditor General noted, Jane Stewart and the Ministry of Human Resources cannot always demonstrate that the programs accomplish what they were intended to. An auditor examines financial records to see if an organization can accurately account for its financial transactions. A minister of the Crown must be accountable to the general public for the operations of his or her department. In light of such serious criticisms, Jane Stewart must, on behalf of her department and the government, speak to the issues of public accountability and political credibility. Contents Introduction Allegations and Accountability Her Majestys Loyal Opposition Whos Responsible? The Patronage Issue Ghosts and Skeletons Creating Employment Discussion, Research, and Essay Questions Comprehensive News in Review Study Modules Using both the print and non-print material from various issues of News in Review, teachers and students can create comprehensive, thematic modules that are excellent for research purposes, independent assignments, and small group study. We recommend the stories indicated below for the universal issues they represent and for the archival and historic material they contain. Cigarette Smuggling: Beating the Tax, November 1993 Medicare: The Cost of Caring, November 1993 Overdrawn: Understanding the Deficit, December 1994 Other Related Videos Available from CBC Learning Does Your Resource Collection Include These CBC Videos? Spin Cycle Allegations and Accountability Government Mismanagement: Minister Besieged For the Record 1. What is an allegation? What connotation does this word often have? Research the word carefully. 2. What does it mean when we hold someone accountable? Why is accountability so important in a democratic society? The Allegations In this situation, critics allege that government mismanagement occurred. They have pointed to examples of projects partially or fully funded by federal grants that struggle financially and are, in the opinion of the critics, poor financial risks; 51 companies funded have declared bankruptcy. There are suggestions as well that some projects applied for the easily obtained grants when they could have used federal loans or even paid their own way. This is not the image that the deficit-cutting Liberals wish to portray. Allegations of reckless spending aside, the greater focus has been upon the alleged use of the grants program as a slush fund to channel money to projects in Liberal ridings. Many costly projects have apparently been created with grant money in primarily Liberal regions. Stewart contends that programs have been funded in all ridings right across Canada. The Auditor General himself noted, however, that federal MPs have been involved too much in the decision-making process, blurring the lines of accountability. The police as well are currently investigating 10 of the job grant projects, three of them in Prime Minister Jean Chrétiens riding. The Burden of Accountability The question of accountability is at the centre of this scandal. Will Jane Stewart become the scapegoat for this situation or will other ministers, party members, or civil servants be forced to share the responsibility? There is nothing like the hint of a scandal to start the slang words flowing. The parties sitting in opposition to the Liberals used terms like billion-dollar boondoggle (a wasteful or impractical project or activity involving graft; the dishonest acquisition of gain) and Liberal slush fund. Slush fund refers to government projects or appropriations yielding rich patronage benefits. In response, the government accused its critics of implementing a witch-hunt. The Liberals, specifically the Ministry of Human Resources, stands accused of mismanaging hundreds of millions of dollars. The Liberals, for their part, maintain that their critics have falsely accused them, much as innocent people were accused of witchcraft hundreds of years ago. Jane Stewart is the cabinet minister responsible for Human Resources Development Canada, a portfolio created in 1993. It is responsible for administering more money than any other ministry, approximately $60-billion. Human Resources has the enormous mandate of administering programs such as welfare, employment insurance, the Canada Pension Plan payments and the Millennium student scholarships. It is also accountable for the broadly termed Human Resources Investment, the focus of the current scandal. Jane Stewarts vast ministry allocates money to create jobs and spur investment across Canada. While reducing unemployment is a laudable goal, critics have charged that the Human Resources bureaucracy was slipshod, allowing millions of dollars to be paid out with little idea of where it went or whether the project was valid in the first place. They also maintain that much of the money from Human Resources has been funnelled toward Liberal ridings, including Prime Minister Chrétiens. Seeing For Yourself The people involved in this issue all have specific political roles to fulfill. As you watch this New In Review, note what each of the following individuals has to say about the mismanagement crisis, be prepared to suggest why and how each is involved, and formulate your
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