OTTAWA—From its quiet beginning in 1997 and for four years after that, the federal sponsorship program was basically run as a political slush fund for the Jean Chrétien Liberals.

Political discretion rather than public accountability rules presided over the spending of its multi-million-dollar budget.

[. . . .] While it was primarily aimed at post-referendum Quebec, other ministers from outside the province also occasionally dipped into it to reward Liberal friends whose pet projects needed extra government funding.

Among the ministers who accessed the funds for this purpose, the Star has found, was British Columbia's David Anderson, the federal environment minister and a key cabinet ally of Paul Martin and the senior minister from his province in the Chrétien government.

[. . . .] When Kelley called Anderson's constituency office, he found the minister's aides eager to help.

"They told me of a secret slush fund where they could access money for constituency programs," he says. "There was no application form, no process other than to write a letter to Mr. Pierre Tremblay at public works."

[. . . .] Anderson's aides also acted as go-betweens with public works officials.

[. . . .] Kelley was told he would be getting $50,000 in two instalments and that he should not worry about paying a commission on the money as that was being taken care off by Public Works Canada.

According to the auditor-general's recent report, Media/I.D.A. Vision was also commissioned to transfer sponsorship funds to five crown corporations.

[. . . .] Kelley's dealings with Anderson's office left him in no doubt the environment minister and his aides were familiar with the modus operandi of the program.

He says he was perplexed by the Prime Minister's recent assertions that he and his colleagues had no idea how so many rules came to be broken over the course of the life of the program.

[. . . . The] B.C. business is a time bomb for the Prime Minister. Unlike the Quebec sponsorship scandal, it speaks to something for which Martin cannot escape responsibility — the ruthless, and at times dubious, tactics he used to oust Jean Chrétien, take over the Liberal party, and become prime minister.

[. . . .] More tellingly, as Victoria police chief Paul Battershill told reporters a few days later, the raids were connected to allegations of "money laundering and proceeds of crime."

[. . . .] Officers searched the offices of two key Martinites — Bruce Clark, the Prime Minister's chief fundraiser on the west coast, and Eric Bornman, communications director for the federal Liberals.

As well, police visited Mark Marissen, B.C. campaign chair for Martin's leadership, and asked him to hand over what he later called important documents he may have inadvertently received.

Most attention, however, focused on Basi. In addition to his provincial role, Basi, too, was a key figure in Martin's successful campaign to take over the federal Liberal party.
Described as a bright and energetic organizer, Basi recruited thousands of new Liberals — many from his own Indo-Canadian community — to capture riding associations for Martin.

Known as Basi's Boys, the new members flooded ridings.

[. . . .]That means that the faction with the most blank membership forms and the most money can win. Indeed, one of the keys to Martin's success over Chrétien was his ability to change the party rules in key provinces so that — up until last February — Martinites had access to the largest number of blank forms.

All that was needed then was money for the $10 fees. In B.C., where Liberal membership skyrocketed from 3,000 to about 40,000, that meant about $370,000. [. . . .]