2007-12-14 22:28:32 UTC
CBC News Online | Updated Jan. 25, 2006
The controversy surrounding former prime minister Jean Chrétien's involvement in two
properties in his riding is rooted in events that are more than a decade old.
But the details were only made public after a series of media reports, a lawsuit and
a barrage of questions raised by a united opposition in the House of Commons.
Chrétien sold his stake in the Auberge Grand-Mère resort just before becoming prime
minister and sold his shares in the Grand-Mère Golf Course shortly after that.
But he wasn't paid for the golf course shares until 1999. The issue at the heart of
the debate was, when exactly did Chrétien stop having an "interest" in the properties?
Years after opposition members first cried foul, the owner of the Auberge Grand-Mère
faced bankruptcy and arson charges, and the former president of the Business
Development Bank of Canada (BDC) successfully sued his old workplace for wrongful
Here's a timeline of the events:
Jean Chrétien and two business partners buy the Grand-Mère Golf Course, located
beside the Auberge Grand-Mère, a hotel in Shawinigan, Que., in Chrétien's riding of
Saint-Maurice. They buy the golf course from Consolidated Bathurst for $625,000.
June 23, 1990
Jean Chrétien is elected leader of the Liberal party.
A fourth partner invests $250,000 in the golf course. Each of the four partners now
has a 25 per cent share.
Chrétien and his partners sell the Grand-Mère hotel to Yvon Duhaime, an old friend of
Chrétien's and a well-known Liberal.
Oct. 25, 1993
Chrétien becomes prime minister when the Liberals win 177 seats in the federal election.
Chrétien sells his share of the Grand-Mère Golf Course to Jonas Prince, a Toronto
real estate tycoon.
Chrétien learns Jonas Prince hasn't paid for the golf course and notifies Howard
Wilson, the federal ethics counsellor responsible for upholding the code of conduct
among public officials.
Chrétien phones François Beaudoin, president of the federal Business Development Bank
of Canada, about a $2 million loan sought by Yvon Duhaime, who bought the Auberge
Grand-Mère. Duhaime wants the money to expand the hotel. Chrétien meets with the BDC
president again in May to talk about the loan.
The Business Development Bank rejects Duhaime's loan application, saying it is too
Also in September, a company owned by Claude Gauthier, a businessman and Liberal
supporter, buys some land beside the golf course for $525,000.
Chrétien phones Beaudoin about a scaled-down version of the Auberge expansion plan.
The bank later approves a loan of $615,000 to Duhaime. Duhaime also gets a $164,000
grant from the Human Resources Department.
June 2, 1997
Chrétien and the Liberals win the federal election.
The federal ethics counsellor rules Chrétien did not violate cabinet
conflict-of-interest rules in regards to the federal aid received by Duhaime. But the
ethics counsellor doesn't know about Chrétien's personal contacts with Beaudoin at
Chrétien threatens to sue Reform Leader Preston Manning and MP Jason Kenney for
alleging he personally benefited from dealings with Claude Gauthier, who bought the
land beside the golf course. But Chrétien later drops the threat saying he doesn't
want to stifle debate.
Chrétien's shares in the golf course are finally sold to a new buyer, Louis Michaud,
a Montreal millionaire. Again, the ethics counsellor rules there is no violation of
conflict rules in the case.
Chrétien admits he spoke to the BDC president but says he didn't do anything wrong.
He says that, by helping Duhaime secure a mortgage, he was just doing his job as the
MP for the Shawinigan riding.
The ethics counsellor rules Chrétien's phone calls to the president of the bank did
not breach the federal ethics code.
But with the federal election just around the corner, the issue is far from dead.
The leaders of the four other major political parties want an independent inquiry or
an RCMP investigation, or both. They're not convinced that the ethics counsellor, who
was appointed by the prime minister, doesn't have a conflict of interest of his own.
Canadian Alliance Leader Stockwell Day calls Chrétien a criminal. Conservative Leader
Joe Clark says Chrétien should apologize to the Canadian public for abusing power.
NDP Leader Alexa McDonough calls Chrétien morally bankrupt. And Bloc Québécois Leader
Gilles Duceppe says the whole thing "still smells like something."
Nov. 27, 2000
The Liberals win the federal election. Jean Chrétien becomes the first prime minister
to win three consecutive majorities since William Lyon Mackenzie King.
Chrétien refuses to answer questions about the hotel controversy while on the Team
Canada trade mission in China, saying it's simply not his practice to discuss
domestic issues while out of Canada.
Feb. 19, 2001
The RCMP say there is no basis for a criminal investigation into the case.
Joe Clark vows to continue asking questions about Chrétien's involvement in the loan.
Industry Minister Brian Tobin responds by asking Clark to give up "this nonsense" and
to stop what he calls a "character assassination."
The next day, Clark accuses Chrétien of making inaccurate statements to the House of
Commons. Chrétien responds by accusing Clark of conducting a witch hunt. "He started
as Joe Who and now he's perhaps Joe McCarthy," Chrétien says, referring to the
American senator and communist-hunter of the 1950s.
Clark's evidence is a memo from the spring of 1999 that shows that Jean Carle, a
former aide of Chrétien, acted as an intermediary between the Prime Minister's Office
and the federal Business Development Bank president.
In early February, Chrétien answered "no" when Clark asked whether the former aide
played any role in the affair. Chrétien, didn't respond directly to the question but
his office explained that when Chrétien told the House of Commons Jean Carle had no
involvement in the hotel loan file, he meant Carle had nothing to do with getting the
Clark wants Chrétien to apologize to the House of Commons. "He can go into the House
and use whatever excuse he wants but say he apologizes for misleading the House and
set the record straight," Clark says while on his way to a caucus meeting. "The prime
minister can't be above the House of Commons."
Feb 23, 2001
During question period, Clark holds up a letter written by François Beaudoin in 1999.
In the letter, Beaudoin complains of political interference in the hotel loan. He
says he was fired as the president of the Business Development Bank of Canada after
suggesting the bank call in the loan (Beaudoin's wrongful dismissal suit begins in
Montreal in September 2003).
March 2, 2001
The ethics counsellor again clears Chrétien. The opposition use it as more proof the
prime minister is too cozy with the ethics counsellor because Chrétien announces the
counsellor's latest findings in the House of Commons 90 minutes before they're released.
March 23, 2001
Clark says Chrétien should step down as prime minister until a public inquiry looks
into whether he violated the conflict-of-interest guidelines governing members of
The House leaders of all the opposition parties also call for an emergency debate but
the deputy Speaker says this is an ongoing issue and not an emergency.
March 26, 2001
Chrétien agrees to release all documents involved in the Grand-Mère affair, pending
the consent of private partners involved in the transaction.
Sept 2, 2003
Caisse Populaire de Grand-Mére files legal notice threatening to auction off the inn
owned by Yvon Duhaime. The BDC would only be permitted to take what's owed to it
after the credit union takes its money. If the inn were sold for less than the amount
owing to both institutions, taxpayers would absorb the loss. The BDC lent a total of
$615,000 to the Auberge Grand-Mère.
Sept 3, 2003
The wrongful dismissal suit of François Beaudoin, former president of the federal
Business Development Bank of Canada, begins in Montreal. He says he was forced to
resign his post and the bank later scrapped a signed pension agreement because he
dared to question a $615,000 loan to a friend of Prime Minister Jean Chrétien. The
trial is expected to last for months.
Feb. 6, 2004
Beaudoin wins his lawsuit against the BDC. The judge orders his $200,000 annual
pension and $245,000 severance package reinstated.
Sept. 14, 2004:
The Business Development Bank of Canada reaches a settlement to end its dispute with
Beaudoin. The details of the settlement are not released.
Feb. 2, 2004: A fire, later determined to be arson, damages the Auberge Grand-Mère.
March 11, 2004: Yvon Duhaime, the owner of the Auberge Grand-Mère, is charged with
setting fire to his inn.