Shawinigate
Encyclopedia
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 of Shawinigan, Quebec
.
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.
after a series of newspaper reports and after persistent questioning by members of the Opposition in the Canadian House of Commons
, and a formal lawsuit.
In 1999, Ethics Commissioner Wilson ruled that Chrétien had not violated any ethical boundaries when the Hotel was awarded federal grant money although he later admitted that he was unaware Chrétien had taken such a personal interest by meeting with the Bank President in an effort 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", while Joe Clark
continued an investigation accusing Chrétien of abusing power, and demanded that he resign as Prime Minister, until a public inquiry
could be held.
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.
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. This decision has been appealed to the Supreme Court of Canada and, as of April 2009, a hearing is scheduled.
Prime Minister of Canada
The Prime Minister of Canada is the primary minister of the Crown, chairman of the Cabinet, and thus head of government for Canada, charged with advising the Canadian monarch or viceroy on the exercise of the executive powers vested in them by the constitution...
Jean Chrétien
Jean Chrétien
Joseph Jacques Jean Chrétien , known commonly as Jean Chrétien is a former Canadian politician who was the 20th Prime Minister of Canada. He served in the position for over ten years, from November 4, 1993 to December 12, 2003....
was accused of profiting from real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
deals, and government policies in his hometown of Shawinigan, Quebec
Shawinigan, Quebec
Shawinigan is a city located on the Saint-Maurice River in the Mauricie area in Quebec, Canada. It has a population of approximately 51,904 people ....
.
The scandal
In 1988, prior to becoming Prime Minister, Chrétien and two business partners had purchased the $625,000 Grand-MèreGrand-Mère, Quebec
Grand Mère is a settlement and former municipality in central Quebec, Canada on the Saint-Maurice River. As a result of the municipal reorganization in Quebec which took effect at the beginning of 2002, Grand-Mère now forms part of the City of Shawinigan. Population in 2001 was...
Golf Course
Golf course
A golf course comprises a series of holes, each consisting of a teeing ground, fairway, rough and other hazards, and a green with a flagstick and cup, all designed for the game of golf. A standard round of golf consists of playing 18 holes, thus most golf courses have this number of holes...
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
Business Development Bank of Canada
The Business Development Bank of Canada is a crown corporation financial institution wholly owned by the Government of Canada. BDC plays a leadership role in delivering financial and consulting services to Canadian small business, with a particular focus on technology and exporting.BDC's debt...
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
Human Resources and Skills Development Canada
The Department of Human Resources and Skills Development , operating under the FIP applied title Human Resources and Skills Development Canada , is the department of the Government of Canada responsible for developing, managing and delivering a variety of social programs and services...
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 being released by the governing Liberal PartyLiberal Party of Canada
The Liberal Party of Canada , colloquially known as the Grits, is the oldest federally registered party in Canada. In the conventional political spectrum, the party sits between the centre and the centre-left. Historically the Liberal Party has positioned itself to the left of the Conservative...
after a series of newspaper reports and after persistent questioning by members of the Opposition in the Canadian House of Commons
Canadian House of Commons
The House of Commons of Canada is a component of the Parliament of Canada, along with the Sovereign and the Senate. The House of Commons is a democratically elected body, consisting of 308 members known as Members of Parliament...
, and a formal lawsuit.
In 1999, Ethics Commissioner Wilson ruled that Chrétien had not violated any ethical boundaries when the Hotel was awarded federal grant money although he later admitted that he was unaware Chrétien had taken such a personal interest by meeting with the Bank President in an effort to secure the $615,000 loan.
While Chrétien faced harsh criticism from all opposition parties, Stockwell Day
Stockwell Day
Stockwell Burt Day, Jr., PC, MP is a former Canadian politician, and a member of the Conservative Party of Canada. He is a former cabinet minister in Alberta, and a former leader of the Canadian Alliance. Day was MP for the riding of Okanagan—Coquihalla in British Columbia and the president of...
, then-leader of the Canadian Alliance
Canadian Alliance
The Canadian Alliance , formally the Canadian Reform Conservative Alliance , was a Canadian conservative political party that existed from 2000 to 2003. The party was the successor to the Reform Party of Canada and inherited its position as the Official Opposition in the House of Commons and held...
, denounced him calling him a "criminal", while Joe Clark
Joe Clark
Charles Joseph "Joe" Clark, is a Canadian statesman, businessman, and university professor, and former journalist and politician...
continued an investigation accusing Chrétien of abusing power, and demanded that he resign as Prime Minister, until a public inquiry
Public inquiry
A Tribunal of Inquiry is an official review of events or actions ordered by a government body in Common Law countries such as the United Kingdom, Ireland or Canada. Such a public inquiry differs from a Royal Commission in that a public inquiry accepts evidence and conducts its hearings in a more...
could be held.
Litigation
In September 2003, former president of the Bank that had initially declined the loan to Duhaime, won his wrongful dismissalWrongful dismissal
Wrongful dismissal, also called wrongful termination or wrongful discharge, is an idiom and legal phrase, describing a situation in which an employee's contract of employment has been terminated by the employer in circumstances where the termination breaches one or more terms of the contract of...
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.
As of early March 2008, Ontario's top court has ordered the National Post
National Post
The National Post is a Canadian English-language national newspaper based in Don Mills, a district of Toronto. The paper is owned by Postmedia Network Inc. and is published Mondays through Saturdays...
, 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. This decision has been appealed to the Supreme Court of Canada and, as of April 2009, a hearing is scheduled.