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Canadian PM Cleared in Scandal

A government inquiry report on a money scandal at the center of Canadian politics for the past two years has cleared Prime Minister Paul Martin and blamed aides to his ruling-party predecessor, Jean Chretien, for a system of contract kickbacks and illegal political contributions. In response to the report`s release on Tuesday, Martin ordered his Liberal Party to repay about $1 million in political contributions, dismissed 10 party employees and sent the report to the Royal Canadian Mounted Police for use in criminal prosecutions.

The long-awaited finding leaves the prime minister personally unscathed, but it delivers a blow to his party as it prepares for national elections, now likely to be held in February. "The report has shown there is a culture of greed in the Liberal Party," thundered Jack Layton, leader of the opposition New Democratic Party.

The inquiry included nine months of public hearings that sometimes transfixed the country. The report concluded that a government-funded advertising campaign, aimed at selling federalism to succession-leaning Quebecers in the late 1990s, spawned kickbacks, payoffs, padded payrolls, politically steered contracts and the laundering of political contributions to the Liberal Party.