Rahim Jaffer's company sought $100-million in federal funds for a bio-fuel project at the same time as his wife, MP Helena Guergis, then a cabinet minister, promoted the venture to officials in her riding, according to government documents.
The revelation is likely to fuel opposition allegations that Mr. Jaffer was involved in unregistered lobbying activities at Green Power Generation, which he co-founded after losing his Edmonton seat in the 2008 election, and his potential financial interest in Wright Tech Systems Inc. while his wife was promoting its BioDryer project to officials in Simcoe County.
GPG sought a total of $135-million in federal funds last year for three environmental projects, including the BioDryer, that had a total value of $820-million. The federal government rejected all three, and a proponent of one said he didn't even know Mr. Jaffer had taken his proposal to Ottawa.
"I didn't know it went in," said Joe Jordan, a former Liberal MP and co-owner of Upper Canada Solar Generation Ltd. He said it is unclear why GPG acted on behalf of his company.
Ms. Guergis, who resigned as minister of state for the status of women and was expelled from the Conservative caucus two weeks ago, has vigorously denied that she was in a conflict of interest when she sent the letter to Simcoe County on Sept. 9 "to encourage" officials to consider the BioDryer waste-disposal technology.
"There was nothing unusual or improper about me writing a letter in support of a constituent and his company, in which neither I nor any member of my family have or had any interest, financial or otherwise," she said in a statement last week.
However, federal officials told The Globe and Mail that Mr. Jaffer's company, Green Power Generation, submitted a proposal to the government seeking $100-million from the Green Infrastructure Fund for the project between Sept. 8 and 14, at about the same time that Ms. Guergis sent her letter.
This suggests that Ms. Guergis sent her letter even as the proposal was being prepared or was under consideration by the government.
Government officials studied the project, and told Green Power Generation near the end of the month that it had been rejected.
Mr. Jaffer said before a parliamentary committee this week that he was not involved in sending the proposal to the government, while his business partner, Patrick Glémaud, said he did not remember the name of the projects that he submitted.
Mr. Jaffer, Mr. Glémaud, Ms. Guergis and Wright Tech Systems did not respond to calls and e-mails yesterday.
On Sept. 11, Mr. Jaffer was arrested on drunk driving and cocaine possession charges in a rural area north of Toronto after a dinner with Nazim Gillani, a Toronto area financier with whom he was working to help get grants and public funds for green technologies. One of them was the BioDryer made by Wright Tech Systems, which Mr. Gillani had approached about offering public shares in the firm.
On Sept. 12, the political power couple joined Mr. Gillani and his girlfriend, as well as Mr. Gillani's business partner Mike Mihelic and his girlfriend, for dinner at the trendy Toronto restaurant Sassafraz. Mr. Gillani's spokesman, Brian Kilgore, has said the dinner was the same night that actors Matt Damon and Michael Douglas -- in town for the Toronto International Film Festival -- dined at Sassafraz, drawing paparazzi and creating pandemonium outside the restaurant. Mr. Kilgore said he does not know what was discussed, but described the dinner as "social."
The charges against Mr. Jaffer were later dropped, and he pleaded guilty to dangerous driving.
In a related development, federal Ethics Commissioner Mary Dawson said she will not investigate Ms. Guergis's involvement in the BioDryer project under the Conflict of Interest Act, which applies only to cabinet ministers, because Ms. Guergis sent the letter on her MP's letterhead and was not acting in her ministerial role.
However, Ms. Dawson said she is looking at the matter under the MPs' code of conduct, and has given Ms. Guergis 30 days to present her position on the letter.
The opposition focused its attacks during yesterday's Question Period on allegations that Mr. Jaffer used his connections in Conservative circles in Ottawa to further his private interests.
NDP MP Thomas Mulcair deplored what he called a new era of "government sleaze," while Liberal MP Bob Rae said that the Conservatives are favouring their own.
"Does [the Prime Minister]not realize that he bears some responsibility for the culture of deceit that envelopes the Conservative government, that gives special access to some, and denies others the same kind of treatment?" Mr. Rae asked.
The government responded by distancing itself from Mr. Jaffer, pointing out that his projects never received a cent of federal funding and that all allegations involving Mr. Jaffer and Ms. Guergis were referred to appropriate authorities.
"The government has put in place important laws to regulate the affairs of lobbyists," Prime Minister Stephen Harper said. "If Mr. Jaffer or any other individual has violated those laws, I am confident they will be held accountable."
With reports from Gloria Galloway and Greg McArthur