Sponsorship scandal

The sponsorship scandal, "AdScam" or Sponsorgate, is a scandal that came as a result of a Canadian federal government "sponsorship program" in the province of Quebec and involving the Liberal Party of Canada, which was in power from 1993 to 2006. The program was originally established as an effort to raise awareness of the Government of Canada's contributions to Quebec industries and other activities in order to counter the actions of the Parti Québécois government of the province that worked to promote Quebec independence.

The program ran from 1996 until 2004, when broad corruption was discovered in its operations and the program was discontinued. Illicit and even illegal activities within the administration of the program were revealed, involving misuse and misdirection of public funds intended for government advertising in Quebec. Such misdirections included sponsorship money awarded to Liberal Party-linked ad firms in return for little or no work, in which firms maintained Liberal organizers or fundraisers on their payrolls or donated back part of the money to the Liberal Party. The resulting investigations and scandal affected the Liberal Party of Canada and the then-government of Prime Minister Paul Martin. It was an ongoing affair for years, but rose to national prominence in early 2004 after the program was examined by Sheila Fraser, the federal auditor general.

Her revelations led to the Martin government establishing the Gomery Commission to conduct a public inquiry and file a report on the matter. The official title of this inquiry was the Commission of Inquiry into the Sponsorship Program and Advertising Activities; it is commonly referred to as the "Gomery Report". In the end, the Commission concluded that $2 million was awarded in contracts without a proper bidding system, $250,000 was added to one contract price for no additional work, and $1.5 million was awarded for work that was never done, of which $1.14 million was repaid. The Commission found that a number of rules in the Financial Administration Act were broken. The overall operating cost of the Commission was $14 million.

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