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Lobbyist had role in purchase of PM‘s new jets
Cost $100-million: Defence documents show campaign by Bombardier‘s man
Andrew McIntosh
National Post
Monday, September 23, 2002
OTTAWA - The federal government‘s apparently rushed decision to spend $100-million in March on corporate jets for the Prime Minister and other ministers was, in fact, the culmination of a seven-month campaign by a Bombardier lobbyist, government documents reveal.
The previously unknown role played by Bombardier lobbyist Brian Mersereau, an executive vice-president with Hill & Knowlton in Ottawa, is revealed and described in internal National Defence department documents and e-mails obtained by the National Post under the Access to Information Act.
The government has faced criticism from all sides of the House for rushing through the deal and announcing the purchase in March, prior to the two-week Parliamentary Easter break.
The two executive jets being replaced were in excellent condition and fully operational, Lieutenant-Colonel Dave Mulcair, commander of 412 Transport Squadron, which operates them, said this year.
However, the documents reveal that, while senior Defence Department officials considered they did not need to modernize or upgrade their Challenger jet fleet, the lobbyist for Bombardier continued to work the file and the corporate jet purchase went ahead.
It was sealed on March 31, the last day of the government fiscal year, after federal officials had received what one government source called "an executive order" and within days had signed what another called "a hastily negotiated contract."
An aircraft sale of that magnitude would have earned Mr. Mersereau and Hill & Knowlton as much as $1-million in fees for their work.
The contract for the jets was itself exceptional: It was untendered and required the government to make a $91.8-million advance cash payment to Bombardier via a wire transfer to Montreal, although the new jets and spare parts would not be delivered for months, military officials say in e-mails about the contract.
If the government later determined it did not need to spend as much as anticipated on spare parts -- and it did just that -- Bombardier agreed under the contract that it would pay the government 6% interest on any unspent balance or what it called "unliquidated portion."
Mr. Mersereau, the lobbyist, worked with and had access to officials at the most senior level of government, including officials in the departments of Public Works, National Defence and the Privy Council Office.
The lobbying campaign for Bombardier began on Aug. 15, 2001, when Mr. Mersereau and company officials met with senior Defence officials in Ottawa.
The meeting was summarized in a note to file that same day by Colonel T. F. Leversedge of National Defence.
He entitled the summary note "Executive Flight Services: Swapping Out The Existing Challengers."
At the meeting, Bombardier officials outlined their available product line "along with options for replacing the Canadian Forces existing VIP Challenger fleet."
There was a slide show and a discussion ensued about direct purchasing, leasing and even fractional ownership.
Bombardier representatives also touted the "advantages" of the government acquiring "a mixed fleet" made up of Learjets (another Bombardier affiliate), Challengers and its new, larger Global Express jet.
In March 2002, after DND employees and managers had repeatedly said they didn‘t need to replace any Challengers in their fleet, they were contacted by Mr. Mersereau to discuss two new Challenger 604s "which are being considered," according to an e-mail the lobbyist sent the military official.
Following meetings he had with Public Works officials in Montreal on March 20, Mr. Mersereau e-mailed DND procurement manager Gordon Hunter to discuss the fate of two used government Challengers after two new ones were purchased, involving himself in talks that went well beyond lobbying.
The lobbyist asked military officials if they wanted to trade in the two older Challengers and thereby obtain a "credit" against fit-up costs for the two new planes or whether National Defence might secure for itself extra funds by declaring the two aircraft surplus and "sell them on the open market."
Military planners liked the lobbyist‘s second option best; that way, Defence could keep the cash generated by selling the used jets for use on other items.
When National Defence department employees began preparing media briefing materials to answer reporters‘ questions about the new jet purchase, which was bound to be controversial because it still had not begun tendering for new helicopters nine years after taking office, initial references to the purchase being made following "an unsolicited proposal" by Bombardier" and its Ottawa lobbyist were deleted from the media briefing documents.
One anticipated question included in the so-called Media Lines was: "Who initiated this acquisition and how did this project move to the top of the acquisition list so rapidly?"
The initial answer was: "This acquisition was prompted by an unsolicited proposal by Bombardier."
The answer was quickly changed to: "This is a government of Canada decision to upgrade the existing fleet. This acquisition in no way affects the modernization of Canadian Forces equipment nor equipment acquisition programs."
Other heavily blacked out internal documents show there was concern in the office of the Minister of National Defence about the speed with which the jets were being acquired in March and the fact the government was breaching federal rules that require all major contracts be tendered.
"You would require a justification for sole sourcing this to Bombardier and not competing it, which is the normal policy to be followed," one briefing note suggested. "Presumably, the deal is so good that it is in the public interest."
Military public relations advisors selected key staff members who would "talk in positive terms" after the purchase was publicly announced, even though it involved an acquisition their own department deemed unnecessary.
+++++
Military opposed buying new jets
PM‘s officials intervened to try to close $100M deal
Elizabeth Thompson and James Murray
The Montreal Gazette
Officials close to Prime Minister Jean Chrétien intervened with civil servants in January, seeking information to justify the purchase of two new state-of-the-art Challenger 604 corporate jets, according to internal National Defence documents obtained by the Montreal Gazette.
However, documents made public under the federal Access to Information Act show top military brass felt the existing Challenger fleet was in good shape and hoped the briefing notes they were asked to prepare would dissuade the government from buying the new aircraft.
"A director-general from Tran-sport Canada called me on this" (replacing the Challenger 601 with the 604), says a handwritten note by Maj.-Gen. Richard Bas-tien on Jan. 9, penned on a memo requesting a briefing note for the chief of defence staff on the reliability of the existing fleet.
"I suspect this briefing note must be to see if we had a problem. Unfortunately, this briefing note will demonstrate otherwise."
Another officer says he was contacted by a member of the Privy Council Office, the body that provides support to the prime minister and cabinet.
"Subsequent to the initial flurry of e-mails on the subject, we were asked by the PCO staffer to go back over a longer period," wrote Col. Terry Leversedge, director of Aerospace Equipment Business Management, on Jan. 8.
"The trend (or lack thereof) remains the same. Please note that the stats are for administrative-support flights only. If the training flights etc. are rolled in, the dispatch reliability improves yet again."
Mr. Chrétien came under fire in the House of Commons in the spring, following a decision to bypass normal procedures and spend $100 million on two new Challenger 604 jets.
The government argued the existing fleet was aging and the new planes had a better range and needed less distance to land, allowing them to fly into smaller communities. At the time, Mr. Chrétien refused to reveal what role he might have played in the purchase, saying it was a "government of Canada" decision.
But a memo sent by former Privy Council clerk Mel Cappe to Mr. Chrétien shows the question was already on the prime minister‘s desk by late January.
In the Jan. 29 memo, stamped "secret," Mr. Cappe says the mission of the Challenger fleet is "to provide domestic travel services and the aircraft are well suited to this role."
The memo, with all recommendations removed before it was released, says the fleet‘s dispatch reliability rate from April 1, 2000, to Nov. 20, 2001, was 99.18 per cent, slightly below the industry standard.
The memo also suggests a number of other issues were identified with respect to the Challengers, including: "need for secure communications capability on all aircraft, worn passenger cabins, restrictive seating configuration, limited flying range and capability, in-flight incidents and other breakdowns."
The memo says secure communications were installed in the Challengers in October 2001.
Thoren Hudyma, spokesman for the Prime Minister‘s Office, yesterday denied the PMO initiated any request for information about the serviceability of the existing Challenger fleet.
"We were not the originators. We did not request the serviceability check."
Cost $100-million: Defence documents show campaign by Bombardier‘s man
Andrew McIntosh
National Post
Monday, September 23, 2002
OTTAWA - The federal government‘s apparently rushed decision to spend $100-million in March on corporate jets for the Prime Minister and other ministers was, in fact, the culmination of a seven-month campaign by a Bombardier lobbyist, government documents reveal.
The previously unknown role played by Bombardier lobbyist Brian Mersereau, an executive vice-president with Hill & Knowlton in Ottawa, is revealed and described in internal National Defence department documents and e-mails obtained by the National Post under the Access to Information Act.
The government has faced criticism from all sides of the House for rushing through the deal and announcing the purchase in March, prior to the two-week Parliamentary Easter break.
The two executive jets being replaced were in excellent condition and fully operational, Lieutenant-Colonel Dave Mulcair, commander of 412 Transport Squadron, which operates them, said this year.
However, the documents reveal that, while senior Defence Department officials considered they did not need to modernize or upgrade their Challenger jet fleet, the lobbyist for Bombardier continued to work the file and the corporate jet purchase went ahead.
It was sealed on March 31, the last day of the government fiscal year, after federal officials had received what one government source called "an executive order" and within days had signed what another called "a hastily negotiated contract."
An aircraft sale of that magnitude would have earned Mr. Mersereau and Hill & Knowlton as much as $1-million in fees for their work.
The contract for the jets was itself exceptional: It was untendered and required the government to make a $91.8-million advance cash payment to Bombardier via a wire transfer to Montreal, although the new jets and spare parts would not be delivered for months, military officials say in e-mails about the contract.
If the government later determined it did not need to spend as much as anticipated on spare parts -- and it did just that -- Bombardier agreed under the contract that it would pay the government 6% interest on any unspent balance or what it called "unliquidated portion."
Mr. Mersereau, the lobbyist, worked with and had access to officials at the most senior level of government, including officials in the departments of Public Works, National Defence and the Privy Council Office.
The lobbying campaign for Bombardier began on Aug. 15, 2001, when Mr. Mersereau and company officials met with senior Defence officials in Ottawa.
The meeting was summarized in a note to file that same day by Colonel T. F. Leversedge of National Defence.
He entitled the summary note "Executive Flight Services: Swapping Out The Existing Challengers."
At the meeting, Bombardier officials outlined their available product line "along with options for replacing the Canadian Forces existing VIP Challenger fleet."
There was a slide show and a discussion ensued about direct purchasing, leasing and even fractional ownership.
Bombardier representatives also touted the "advantages" of the government acquiring "a mixed fleet" made up of Learjets (another Bombardier affiliate), Challengers and its new, larger Global Express jet.
In March 2002, after DND employees and managers had repeatedly said they didn‘t need to replace any Challengers in their fleet, they were contacted by Mr. Mersereau to discuss two new Challenger 604s "which are being considered," according to an e-mail the lobbyist sent the military official.
Following meetings he had with Public Works officials in Montreal on March 20, Mr. Mersereau e-mailed DND procurement manager Gordon Hunter to discuss the fate of two used government Challengers after two new ones were purchased, involving himself in talks that went well beyond lobbying.
The lobbyist asked military officials if they wanted to trade in the two older Challengers and thereby obtain a "credit" against fit-up costs for the two new planes or whether National Defence might secure for itself extra funds by declaring the two aircraft surplus and "sell them on the open market."
Military planners liked the lobbyist‘s second option best; that way, Defence could keep the cash generated by selling the used jets for use on other items.
When National Defence department employees began preparing media briefing materials to answer reporters‘ questions about the new jet purchase, which was bound to be controversial because it still had not begun tendering for new helicopters nine years after taking office, initial references to the purchase being made following "an unsolicited proposal" by Bombardier" and its Ottawa lobbyist were deleted from the media briefing documents.
One anticipated question included in the so-called Media Lines was: "Who initiated this acquisition and how did this project move to the top of the acquisition list so rapidly?"
The initial answer was: "This acquisition was prompted by an unsolicited proposal by Bombardier."
The answer was quickly changed to: "This is a government of Canada decision to upgrade the existing fleet. This acquisition in no way affects the modernization of Canadian Forces equipment nor equipment acquisition programs."
Other heavily blacked out internal documents show there was concern in the office of the Minister of National Defence about the speed with which the jets were being acquired in March and the fact the government was breaching federal rules that require all major contracts be tendered.
"You would require a justification for sole sourcing this to Bombardier and not competing it, which is the normal policy to be followed," one briefing note suggested. "Presumably, the deal is so good that it is in the public interest."
Military public relations advisors selected key staff members who would "talk in positive terms" after the purchase was publicly announced, even though it involved an acquisition their own department deemed unnecessary.
+++++
Military opposed buying new jets
PM‘s officials intervened to try to close $100M deal
Elizabeth Thompson and James Murray
The Montreal Gazette
Officials close to Prime Minister Jean Chrétien intervened with civil servants in January, seeking information to justify the purchase of two new state-of-the-art Challenger 604 corporate jets, according to internal National Defence documents obtained by the Montreal Gazette.
However, documents made public under the federal Access to Information Act show top military brass felt the existing Challenger fleet was in good shape and hoped the briefing notes they were asked to prepare would dissuade the government from buying the new aircraft.
"A director-general from Tran-sport Canada called me on this" (replacing the Challenger 601 with the 604), says a handwritten note by Maj.-Gen. Richard Bas-tien on Jan. 9, penned on a memo requesting a briefing note for the chief of defence staff on the reliability of the existing fleet.
"I suspect this briefing note must be to see if we had a problem. Unfortunately, this briefing note will demonstrate otherwise."
Another officer says he was contacted by a member of the Privy Council Office, the body that provides support to the prime minister and cabinet.
"Subsequent to the initial flurry of e-mails on the subject, we were asked by the PCO staffer to go back over a longer period," wrote Col. Terry Leversedge, director of Aerospace Equipment Business Management, on Jan. 8.
"The trend (or lack thereof) remains the same. Please note that the stats are for administrative-support flights only. If the training flights etc. are rolled in, the dispatch reliability improves yet again."
Mr. Chrétien came under fire in the House of Commons in the spring, following a decision to bypass normal procedures and spend $100 million on two new Challenger 604 jets.
The government argued the existing fleet was aging and the new planes had a better range and needed less distance to land, allowing them to fly into smaller communities. At the time, Mr. Chrétien refused to reveal what role he might have played in the purchase, saying it was a "government of Canada" decision.
But a memo sent by former Privy Council clerk Mel Cappe to Mr. Chrétien shows the question was already on the prime minister‘s desk by late January.
In the Jan. 29 memo, stamped "secret," Mr. Cappe says the mission of the Challenger fleet is "to provide domestic travel services and the aircraft are well suited to this role."
The memo, with all recommendations removed before it was released, says the fleet‘s dispatch reliability rate from April 1, 2000, to Nov. 20, 2001, was 99.18 per cent, slightly below the industry standard.
The memo also suggests a number of other issues were identified with respect to the Challengers, including: "need for secure communications capability on all aircraft, worn passenger cabins, restrictive seating configuration, limited flying range and capability, in-flight incidents and other breakdowns."
The memo says secure communications were installed in the Challengers in October 2001.
Thoren Hudyma, spokesman for the Prime Minister‘s Office, yesterday denied the PMO initiated any request for information about the serviceability of the existing Challenger fleet.
"We were not the originators. We did not request the serviceability check."
