Shawinigate

Shawinigate was a 1990s Canadian political scandal in which Prime Minister Jean Chrétien was accused of profiting from real estate deals, and government policies, in his hometown riding of Shawinigan, Quebec.

The scandal

In 1988, prior to becoming Prime Minister, Chrétien and two business partners had purchased the $625,000 Grand-Mère Golf Course and Auberge Grand-Mère Hotel.

In 1993, six months before he became Prime Minister, Chrétien and his partners agreed to sell the hotel to Yvon Duhaime, a personal friend of Chrétien.

A month after becoming Prime Minister, Chrétien agreed to sell his personal shares in the golf course to Toronto tycoon Jonas Prince. However, by January 1996, Chrétien was still the formal owner of the golf course, since Prince had never paid for the shares. He reported this fact to the Federal Ethics Counsellor, Howard Wilson.

Meanwhile, the new hotel owner, Yvon Duhaime applied to the Business Development Bank of Canada for a $2,000,000 loan to expand the hotel. Chrétien took a personal interest in the transaction, and both phoned and met with the Bank's director, but to no avail - Duhaime's application was declined.

In early 1997, Chrétien began asking the bank if it would be possible for a smaller loan to expand the hotel. The bank agreed to loan Duhaime $615,000 - and the Federal Human Resources Department awarded Duhaime an additional $164,000 grant to expand the hotel.

The scandal comes to light

The scandal came to light slowly, with information only slowly being released by the governing Liberal Party after a series of newspaper reports, consistent questioning from all members of the Opposition in the Canadian House of Commons, and a formal lawsuit. [ [http://www.cbc.ca/news/background/chretien/shawinigan.html CBC News Indepth: Jean Chrétien ] ]

In 1999, Ethics Commissioner Wilson ruled that Chrétien had not violated any ethical boundaries in the Hotel being awarded federal grant money - though he later admitted that he was unaware Chrétien had taken such a personal interest as to meet with the Bank President to secure the $615,000 loan.

While Chrétien faced harsh criticism from all opposition parties, Stockwell Day, then-leader of the Canadian Alliance, denounced him calling him a "criminal". [ [http://www.cbc.ca/news/background/chretien/shawinigan.html CBC News Indepth: Jean Chrétien ] ] , while Joe Clark continued a "witch-hunt" accusing Chrétien of abusing power, and demanded that he resign as Prime Minister, until a public inquiry could be held [ [http://www.wsws.org/articles/2001/apr2001/chre-a10.shtml What's behind Canadian Prime Minister Chrétien's business scandal? ] ] .

In September 2003, former president of the Bank that had initially declined the loan to Duhaime, won his wrongful dismissal claim, and it was ruled that he was fired because he had suggested that it was time to collect on the $615,000 loan in 1999. [ [http://www.cbc.ca/news/story/2004/02/06/beaudoin040205.html 'Shawinigate' bank exec wins dismissal suit ] ]

As of Early March 2008, Ontario's top court has ordered the National Post, a major Canadian newspaper, to hand over documents in the "Shawinigate" allegations , saying the need to enforce the law should outweigh the need to protect anonymous sources.

"We do not diminish the press's important role in uncovering and reporting an alleged wrongdoing," the three-judge panel wrote. "But in our society, it is the police who are charged with the crucial role of investigating and prosecuting crime."

In a decision released Friday, the Court of Appeal overturned an earlier ruling that quashed an RCMP search warrant issued against the newspaper and reporter Andrew McIntosh.

The result of the decision could include forensic testing of both the documents and envelope to determine if the documents are legitimate.

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