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A mysterious scandal slowly unfolds

Harper sacks a senior minister and reports her to the mounties, but fails to disclose why. The Afghan torture issue heats up. Hilary criticizes Harper. The loonie surges. Plus: the world's dumbest thieves?

 Prime Minister Stephen Harper is fending off two of the biggest scandals to face his four-year-old government in recent weeks.

Harper jettisoned one of his highest-profile female cabinet ministers and referred allegations against her to the Royal Canadian Mounted Police. Having called in the police, the Prime Minister has refused to divulge what caused him to not only fire Helena Guergis from her post as Minister of State for the Status of Women, but to expel her from the Conservative Party caucus. 

While there was rampant speculation about the reasons – including allegations of drug use, a questionable mortgage on a new home, or even unregistered lobbying by her husband – the reason for the abrupt firing seems to be allegations that Guergis and husband Rahim Jaffer could be part of a fraud scheme involving offshore companies and an indicted Toronto businessman, Nazim Gillani. Harper was acting on information provided by a private investigator, Derrick Snowdy, who reportedly told Conservative Party lawyers that Gillani had told him about offshore companies that had been set up in Guergis’s and Jaffer’s names and suggested he had compromising photos of the two to keep them in line.

Gualini has denied any wrongdoing, as has Guergis. Jaffer, a former member of parliament from Alberta, and Gillani have been called to appear before a parliamentary committee in what is likely to be the first of many as opposition parties seek to hobble the Harper government by keeping the scandal at the forefront. They are also seeking probes from parliament’s ethic commissioner and lobbying commissioner.

If only that were Harper’s only headache.  The Afghan torture issue moved back to the front burner this past week with renewed allegations that Canadian soldiers turned detainees over to Afghan police interrogators, knowing full well that they would likely be tortured or killed. The allegations, first brought to light last year by Richard Colvin, a diplomat now in Canada’s Washington embassy who had been the liaison for security matters. He called reports of torture a hot potato within the government. This week, a former translator, Ahmadshah Malgarai, told a parliamentary committee that Canadian soldiers had discussed the likelihood that a captive would be tortured, but turned him over anyway. He also said an unnamed Canadian officer shot a detainee in the head at close range.

Military and foreign affairs department officials deny the claims.

And while the Canadian military is readying to withdraw from Afghanistan in 2011, despite having been asked by U.S. Secretary of State Hillary Clinton to remain on the frontlines, the government announced that 90 new specialists would be deployed to train Afghan police units.

In a testy visit to Ottawa as part of the G8 foreign ministers meeting last week, Clinton also criticized Harper for refusing to invite Scandinavian countries to an Arctic summit. At the same time, she warned him against tying financing for the Women, Infants and Children health initiative to countries that restrict contraception and prohibit abortions. 

Despite the deluge of bad news and worse press, Canadians appear to be comfortable with Harper’s stewardship of the country, though he has not emerged unscathed. A recent Ipsos poll taken before the Guergis scandal broke showed Harper had built a comfortable 10-point margin over Liberal leader Michael Ignatieff. However, a poll released this week, taken as the scandal was unfolding and with the reasons cloaked in secrecy shows respondents had backed off of their support for the Conservatives and put them back in a dead heat with the Liberals. 

Tough new anti-pardon laws are in the works after it was learned that a reviled former hockey coach Graham James, who was convicted of sexual assault on a number of young players, had been given an official pardon after being released at the end of his sentence. What emerged was that this is the norm in almost every case and that even sex offenders routinely have their criminal records expunged. Harper promised quick legislation to close that loophole.

Quebec Premier Jean Charest has some troubles of his own after his former justice minister, Marc Bellemare, said bagmen for the provincial Liberal Party routinely took envelopes of cash from business men, particularly in the scandal-plagued construction industry, and that these same “fundraisers” had pressured him to appoint certain judges of their choosing. Charest vehemently denies the allegations and threatened to sue Bellemare for defamation, but has ordered a judicial inquiry, just to be on the safe side.

The judicial inquiry is likely to do little to revive Charest’s image among voters, as recent polls show his popularity at a career low.

A team of Canadian computer geeks played a key role in cracking one of the most sophisticated computer hacking networks in the world. The hackers, based in China, had been breaking into computers all over the world and stole emails and other information, including from the Dalai Lama’s office and other Tibetan independence groups. The targets of the hackers suggests that it was the work of the Chinese government, but investigators concluded that it is also possible that entrepreneurial hackers figured they could steal the material and then sell it to the Chinese intelligence services.

Money: Canada’s dollar surged past parity with the U.S. greenback this month, marking the first time since 2008 that the loonie has had more purchasing power, at least theoretically, than its U.S. counterpart.  In the immediate future, that is good news for Canadian consumers and companies seeking to invest in new machinery. But economists warn that the rising loonie could slow Canada’s economic recovery by slowing exports and tourism. It will also limit the ability of the Bank of Canada to raise interest rates to limit inflation.

Canadians also got some good financial news last week. Strong economic growth and better-than-expected capital gains on equity markets have combined to significantly shave what had been forecast as a $54-billion deficit for the past fiscal year.

Elsewhere: It seems like something out of the Dukes of Hazard or Dumb and Dumber, but two Manitoba car-stealing convicts redefined the term stupidity. The two, who had been previously convicted of crimes and were wearing house-arrest ankle bracelets, stole a car, cut off their bracelets and tossed them out the window as they sped away. However, things thrown from cars with open windows have a bad habit of landing in the back seat.  Police tracked the two, recovered the car and rearrested the two.