March 26, 2001
Ottawa, Ontario

- 30 -

PMO Press Office: (613) 957-5555

Dear Mr. Clark,

I am writing in response to your letter of March 23. I wish to make it clear from the outset that I categorically reject each of your baseless allegations which, no matter how often they are refuted by the responsible authorities, you persist in making over and over.

The basic facts are as follows:

1) I sold my shares in 161341 Canada Inc. (the company that owned the Grand-Mère golf course) on November 1, 1993. At no time thereafter have I ever owned shares in this company. My only interest was in the debt owed to me from the sale of the shares.

2) There is no financial or legal relationship between the golf course and the neighbouring Auberge Grand-Mère. In any event, any change in the value of the golf course was irrelevant to me as I had sold my shares on November 1, 1993.

3) As Member of Parliament for St. Maurice, I made representations to the Business Development Bank of Canada on behalf of the Auberge Grand-Mère as I felt it was a worthwhile project. As a Member of Parliament I have never hesitated to support similar tourism initiatives in my region if I believed that they would create jobs and enhance the local economy in an area with one of the highest unemployment rates in Canada.

4) My lawyer and trustee, (Ms. Deborah Weinstein) in consultation with the Ethics Counsellor, worked to recover the debt arising from the 1993 sale of my shares in the company that owned the golf course. As an officer of J. & A.C. Consultants she had the authority to do this without seeking my advice or approval.

As to the matter of my shares in 161341 Canada Inc. (the company that owns the Grand-Mère golf course), on November 1, 1993 my family company sold these shares to a company owned by Mr. Jonas Prince of Toronto. At the same time I resigned from the Board of Directors of the company, ending any participation on my part in the business. The sale was free and clear and the shares have never returned to my ownership or control.

I must stress that Mr. Prince did not purchase an option to buy the shares at a later date, but instead bought the shares outright. I did not retain any right or interest in the shares even in the eventuality Mr. Prince failed to meet his obligations. This matter has been repeatedly confirmed by the Ethics Counsellor, Mr. Howard Wilson, who has had access to the original bill of sale and other documents which support the transfer of ownership of the shares to Mr. Prince. As recently as March 16, Mr. Wilson told CBC Newsworld:

"I have access to all of the documents. I have seen all of the documents. I've been able to examine them. They are personal information to the parties, including some other citizens other than Mr. Chrétien, but I have been able to confirm to my entire satisfaction, that these shares were sold in 1993 and never returned into his possession."

A report in the March 23, 2001, National Post suggested that some of the books kept by 161341 Canada Inc. may not be up to date and may therefore not accurately reflect this November 1993 sale and change of ownership of the shares.

The fact of the matter, as confirmed by the Ethics Counsellor, is that I sold the shares to a company controlled by Mr. Jonas Prince in November 1993. This was further confirmed in a recent letter to Industry Canada by Mr. Pierre Paquet, of the law firm Pouliot Mercure, which represents 161341 Canada Inc. Whether the books of the company have been kept up to date subsequent to this divestiture of my interest in the company is obviously something that I would have no knowledge of or responsibility for, and frankly is irrelevant to whether I sold the shares. If you need additional confirmation that Mr. Prince was owner of the shares, you can find it in the fact that he sold them to Mr. Michaud in the fall of 1999. He could not have sold shares that he did not own.

You have made much of a supposed association between the golf course owned by 161341 Canada Inc. and the nearby Auberge despite the fact that there is absolutely no financial or legal link between the two businesses. This point has been made repeatedly by the Ethics Counsellor and others. As he told the Industry Committee on March 20:

"There was no financial interest between the two [the golf course and the Auberge]. The golf course had ceased to have a financial interest mid-1993 in the Auberge. And the Prime Minister ceased to have a financial interest in the golf course in November of 1993."

Since you cannot demonstrate a real association, you have resorted to inventing relationships between the two. I understand that you have come to describe the Auberge as the "19th hole" for golfers who might enjoy a "libation" following their golf game. If you had ever visited the golf course, you might have noted that it boasts its very own bar and restaurant for thirsty and hungry golfers. Rather than providing a service for the golf course, the bar at the Auberge serves as a competitor. So, even your invented links fail the test of common sense.

Furthermore, you suggest that new facts have become available - facts which you claim I have hidden - concerning the role of my lawyer and trustee in obtaining payment of the debt owed to me by Mr. Prince for the sale of the golf course shares.

I should first clarify some of the confusion that has arisen about how Ministers must treat their assets and receivables and what should be placed in a blind trust according to the Conflict of Interest Code for Ministers.

There was obviously no possibility of the shares themselves being placed in a blind trust as they left my ownership before I become Prime Minister. As to the debt itself, Mr. Wilson has made it clear on a number of occasions that there was no requirement under the Conflict of Interest Code to place this particular monetary debt owing to me in a blind trust.

My only concern, as I explained to the House of Commons on a number of occasions was to have Ms. Deborah Weinstein, my lawyer and trustee, collect the debt that Mr. Prince owed to me. Ms. Weinstein always retained my ultimate right to sue Mr. Prince for the full amount which he owed me. As Mr. Wilson outlined in a March 1 statement:

"The legal debt owed the Prime Minister was unaffected by the value of the Golf Course. If the value increased, the Prime Minister had no claims for a higher payment. If the value of the course were to decrease, the debt owed the Prime Minister remained the same.

The Prime Minister always retained the right to sue for repayment in the courts during the period from 1996 to the fall of 1999 when a negotiated settlement was reached."

I want to reiterate that when I was made aware in 1996 that the debt owing me was still outstanding, I informed the Ethics Counsellor of that fact. Even though the debt was not required to be in a blind trust, Deborah Weinstein chose to keep the Ethics Counsellor informed of every step in the process to ensure that the various alternatives contemplated to achieve payment were all in full compliance with the code of conduct for Ministers. This included what was ultimately the successful approach - my lawyer and trustee, acting as a corporate officer for my family company, helped Mr. Prince sell his shares to a third party.

I should stress that Ms. Weinstein, as Corporate Secretary of J. & A.C. Consultants, undertook these discussions and settled the debt on an independent basis. I was never involved in any negotiations and was only aware in a general fashion of her activities. I was unaware of the details of her actions in this regard until such time as she concluded the agreement.

None of these facts have ever been concealed and I am quite frankly puzzled by your theatrics in this regard. My trustee explained the situation to the National Post on January 23, 1999 and the Deputy Prime Minister also explained the matter clearly to the House of Commons on June 7, 1999:

" The shares belong to a Mr. Prince. The Prime Minister's trustee is helping Mr. Prince to find a buyer."

There is nothing new in any of this. This matter has been looked at under a microscope by the Ethics Counsellor who found no wrongdoing. Rather than accept this, your response has been to attack Mr. Wilson's credibility. May I remind you that the Ethics Counsellor is a distinguished public servant.

Both Opposition leaders of the day were consulted before his appointment with the then Leader of the Opposition, Mr. Lucien Bouchard, telling the House of Commons on June 16, 1994:

"I want to make clear right away that we fully support the appointment of Mr. Howard Wilson as Ethics Counsellor. We are aware that Mr. Wilson has had a praiseworthy career in the federal Public Service and that we can have every confidence in his ability to take the helm in this matter at a critical time."

You even went so far as to refer the matter to the RCMP who, like Mr. Wilson, found absolutely no evidence of wrongdoing. Rather than accepting their judgement, your response, as per usual, was to question the integrity of those undertaking the review. Without providing a shred of evidence, you even questioned whether my Chief of Staff may have interfered in the RCMP review.

Perhaps we should also remember that what is at the heart of this matter is a simple hotel expansion project in my riding. Yes it did receive a loan from the Business Development Bank of Canada at a commercial rate, secured by a mortgage. This loan was complemented, however, by financing from the local Caisse Populaire as well as the Fonds de Solidarité des Travailleurs du Québec, indicating that the BDC was not alone in its favourable assessment of the loan request. The project in question created some 20 jobs. The hotel is open for business and it is my understanding that the loan in question is still active.

My priority as the Member of Parliament for St. Maurice has been to create jobs in a region of high unemployment. Working together, all three levels of government have identified tourism as a key component of the economic future of our region. I began to promote the tourism industry in my area some thirty years ago through the creation of La Mauricie National Park.

More recently, I have used my role as the local Member of Parliament to work with my Provincial and local counterparts to support a large number of tourism initiatives including: Shawinigan's la Cité de l'Énergie; the Auberge des Gouverneurs and adjoining conference centre also located in Shawinigan; the Auberge du Lac Sacacomie in the Saint-Alexis-des Monts region; Hotel Le Boisé Inc. in Shawinigan-Sud; Auberge du Lac à l'eau Claire in Saint-Alexis-des-Monts; and Le Baluchon - a hotel and tourist attraction depicting New France - in St. Paulin. Projects like these have created and maintained hundreds of jobs in the tourism industry in my region. To suggest that my motivation in supporting the Auberge Grand-Mère expansion project was any different is without foundation and represents the worst form of mud slinging and character assassination.

As Prime Minister I have always maintained the highest level of integrity when it comes to my work on behalf of my constituents. My actions have always been in full compliance with the Conflict of Interest Code for Public Office holders and to suggest otherwise is simply wrong.

Up to this point I have been reluctant to have documents concerning the sale of my shares in 161341 Canada Inc. made public. First, I believe that all public office holders deserve a degree of privacy when it comes to their personal financial situation - especially when the matter has been fully reviewed by the Ethics Counsellor. You will appreciate that I do not want to create a precedent which will undermine the privacy of future holders of this office. Second, my sale of the golf course shares relate to private citizens who also have a right to privacy in this regard. That being said, due to the extraordinary level of interest generated by unwarranted and unfair opposition attacks, I am prepared to waive my right to privacy in this regard. I have asked the Ethics Counsellor to consult private individuals involved in this matter and seek their consent to release the Bill of Sale between myself and Mr. Prince as well as all relevant documents related to the ownership question.

The release of these documents will add nothing new to this story and will only confirm facts which I have repeated publicly over the last two years.