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New Canadian Scandal Accelerates Mulroney's Fall From Grace

January 23, 1987|KENNETH FREED | Times Staff Writer

OTTAWA — Canadian Prime Minister Brian Mulroney's already precipitous plunge from overwhelming popularity toward political disaster took on a steeper angle this week when his government was hit with yet another scandal.

This latest blow to Mulroney, whose Progressive Conservative Party took power just over two years ago with the largest majority in Canadian parliamentary history, involves an alleged scheme to drive up the price of land purchased last year in Quebec by a federal defense contractor.

So far, the scandal has led to the dismissal of a federal Cabinet minister and has brought accusations of wrongdoing by a Quebec Progressive Party official and charges of high-level cover-ups that may reach as high as the prime minister himself.

Mulroney has ordered an investigation by the Royal Canadian Mounted Police but has refused to disclose what his government knows about the affair.

The scandal could not come at a worse time for Mulroney. Opinion polls rank him last among the three national political party leaders in public approval, and if an election were held today, his party would be hard pressed to finish ahead of the New Democrats, Canada's perennial third party.

"It's bad, bad, bad--the worst," said Jeffrey Simpson, a columnist for the Toronto Globe and Mail and one of the country's most respected political observers.

This view is buttressed by polls indicating that a major reason for the public's distaste for Mulroney and his Tory party, as the Progressive Conservatives are popularly known, is a lack of confidence in his integrity. Cartoonists and some lurid political columnists refer to him constantly as "Lyin' Brian."

Cabinet Aide Fired

After the initial disclosure of the Quebec land scandal in the Saturday edition of the Montreal Gazette, Mulroney fired Andre Bissonette as minister of state for transport, a junior Cabinet position.

There is suspicion that Bissonette leaked secret government information to speculators about a major defense plant being built at St.-Jean-sur-Richelieu in Bissonette's electoral district.

Other press reports, charges by Mulroney's major opposition, the Liberal party and a lawsuit by the defense contractor involved, Oerlikon Aerospace Inc., allege that a major beneficiary of the scheme--which involved driving up the price of the land to over three times its original assessed value by several quick sales--was Normand Ouelette, the 1984 campaign manager for Bissonette and the president of the local Tory party organization.

Oerlikon has sued for the equivalent of nearly $1.6 million in damages that the company contends Ouelette caused by wrongfully driving up the price of the 112-acre site. The Canadian Broadcasting Corp. further reported Thursday that Bissonette's wife also benefited personally from the scheme, although no details were provided.

Bissonette has refused to make any comment except to say he "will be fully vindicated" by the Mounties' investigation, while Ouelette continues to refuse to discuss the charges.

Mulroney told the House of Commons this week that an inquiry by his staff "indicates to me that there were transactions that took place that appear to be odious and completely unacceptable and at variance with the kind of conduct that Canadians can expect and are entitled to receive."

Mulroney's aides say the prime minister hopes that such language and what he claims to have been quick action in removing Bissonette will show both his innocence in the scandal and his determination to root out any hint of corruption.

However, press reports and the political opposition say there is circumstantial evidence indicating that high Mulroney aides, if not the prime minister himself, knew about the scheme days before it was disclosed.

This possibility has been raised several times in Parliament in the form of questions about a newly appointed senator, Jean Bazin, who is one of Mulroney's closest friends.

Bazin is a director of an Oerlikon subsidiary involved in buying the land, and his law firm was told of suspicions that the land value was being inflated as early as August, 1986.

"Is the prime minister (saying) that between August, 1986, and Jan. 13 (the date the government says it first learned of possible problems), his good friend Jean Bazin never once mentioned these irregularities?" asked one Liberal party member.

Mulroney has stuck to his denials of early knowledge, but his credibility is so low that the issue isn't going away.

Election Promises

Public doubts about his integrity began almost with his election in September, 1984. Among other promises of good government, Mulroney had pledged to end patronage in federal appointments.

However, he has filled government posts and boards with old friends and Tory stalwarts and generally has been seen as inept in carrying out policies.

But worse than bad management has been the series of scandals and poor judgment by several of his officials.

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