Advertising scandal hits Canadian PM

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The Independent US

Paul Martin, the Canadian Prime Minister, is fighting to stave off the collapse of his 10-month-old minority Liberal government amid a financial corruption scandal described by commentators as the worst in the country's history.

Paul Martin, the Canadian Prime Minister, is fighting to stave off the collapse of his 10-month-old minority Liberal government amid a financial corruption scandal described by commentators as the worst in the country's history.

The crisis, spawned in part when a US internet blog published testimony last week from court hearings which had been shrouded by a blanket media ban, worsened last night when one of Mr Martin's parliamentary members defected to become an independent.

Recent polls have shown falling support for the Liberals as details of the scandal have unfolded. The Conservative party - the main opposition - is attracting greater support and its leader, Stephen Harper, has been consulting advisers about forcing an election.

The US blog, Captain's Quarters, forced the presiding judge, Justice John Gomery, to lift his media ban on testimony from a witness, the head of a Quebec-based advertising firm.

The scandal, "Adscam", broke more than a year ago. The former Liberal government, led by Jean Chrétien, is said to have transferred nearly C$100m (£43m) of taxpayers' money to advertising firms in the French-speaking province ostensibly to bolster the image of a united Canada in the wake of a razor-thin secession referendum in Quebec in 1995. It is said the firms did little or no work.

Last week, a witness told Justice Gomery's court a large part of the funds channelled to his firm was laundered back to the Liberal Party. He talked of fake invoices, envelopes of money passed across restaurant tables and a payment to a brother of Mr Chrétien.

Mr Martin has denied all knowledge of such matters, but he was finance minister for Mr Chrétien during that time and the opposition parties have signalled that they intend to link him directly to the scandal.

"Like all Liberals and Canadians, I'm offended by what I've heard in recent testimony," the Prime Minister said. "If even part of it turns out to be true, it is abhorrent to us all. Canadians are looking for someone to ... clean up this mess and, as Prime Minister and Liberal leader, I accept that responsibility."

The scandal has unsettled the stock market in Toronto and the Canadian dollar has lost nearly 2 per cent against the US dollar as investors ponder the possibility of a sudden election.

If Conservatives and the main Quebec party, the Bloc Quebecois, joined, they could force an election with a motion of no-confidence. The ruling party has only 132 seats in the 308-seat Ottawa parliament.

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