Reference no: EM131451740

Question: Jean Brault and the Sponsorship Scandal

The curtain was pulled back on a Canadian political scandal as Jean Brault testified at the Gomery inquiry. The sponsorship-kickback scheme toppled a government weeks after the Gomery Commission issued a report that outlined a story of greed, politics, and misconduct involving overspending, kickbacks, and fraudulent billing by communications agencies in Quebec. At the heart of the scandal is advertising executive Jean Brault, who has come a long way since he started his advertising agency, Groupaction, out of his basement in the 1980s. Groupaction became a multi-million dollar company, helped along the way by generous federal government contracts. Brault is facing fraud charges, and it is from his firm that the federal government is trying to recover $35 million.

The floodgates of government sponsorship contracts opened after the 1995 Quebec referendum, paving the way for a story of misuse of taxpayers' money and leading to speculation of widespread political corruption. Much of the deal making took place over lavish lunches and extravagant dinners. One episode included a dinner with Brault and his advertising executives the night before they were going to make a pitch for a big federal contract. The person they were going to pitch to, Chuck Guité, was also there. Although Brault said at the inquiry the contract was not mentioned over dinner, a short time after that meal together Brault's company was awarded the contract. In 2001 Brault met with Joe Morselli, vice-president of fundraising for the Liberal Party, who requested a Liberal organizer be placed on Brault's company payroll. Brault refused, and instead offered to pay $5000/month in cash using a bizarre payment system reminiscent of the underworld. Brault benefited for several years from the nearly $60 million in contracts from the sponsorship program and kept funnelling money back to the Liberal Party. But stress was getting to Brault, and in 2001 he had a falling out with Alain Renaud, a Liberal activist and lobbyist. Brault had been paying Renaud's fees and expenses of almost $1 million, and in return Renaud secured most of Brault's sponsorship and advertising contracts. After the dispute, they parted ways.

Tony Mignacca, a close associate of Alfonso Galiano, the former cabinet minister who had been in charge of the sponsorship program, began to pressure Brault to take Renaud back. Mignacca gave Brault the impression that Groupaction's account with Via Rail would be in jeopardy if he did not re-hire Renaud. In 2002, Brault knew a federal advertising contract for the Department of Justice was coming up. Because Brault's firm was not ready to bid, he wanted a delay in the closing of the tender. He met with Morselli, proposing $100 000 if the competition was delayed. He paid $50 000 in cash, and the competition was delayed. He planned to pay the rest in April 2002, but by that time Auditor General Sheila Fraser had begun her investigation into Brault's firm. Facing a criminal trial, Jean Brault, the high-flying advertising man, has been brought back to earth.

1. Identify the power bases of the individuals involved in the sponsorship scandal: Jean Brault, Chuck Guité, Joe Morselli, Alain Renaud, Tony Mignacca, and Sheila Fraser.

2. What influence tactics did the prominent characters in the sponsorship saga use to try to pressure people to act in certain ways?

3. What factors contributed to the political behaviour evident in the sponsorship scandal?

Politicking

Forget, for a moment, the ethics of politicking and any negative impressions you may have of people who engage in organizational politics.85 If you wanted to be more politically adept in your organization, what could you do? The following eight suggestions are likely to improve your political effectiveness.