The Business Development Bank of Canada wrote a cheque yesterday to François Beaudoin, its former president, to end what had been an expensive and politically disastrous lawsuit for the Crown corporation.
BDC, which had already spent $4.3-million in its failed legal campaign against Mr. Beaudoin, would not disclose how much it had to pay to settle the suit.
Under terms of the settlement, Mr. Beaudoin will also have no comment, his lawyer, Doug Mitchell, said.
Mr. Beaudoin, who is now a Montreal management consultant, is pleased that the protracted case is over so that he can get on with his life, Mr. Mitchell said.
Mr. Beaudoin was the victim of a particularly vicious vendetta by two Liberal operatives at the bank, Mr. Justice André Denis of Quebec Superior Court said in a ruling that set the stage for the financial settlement.
Mr. Beaudoin had claimed he was the victim of political retaliation because he had tried to revoke a $615,000 loan to the Auberge Grand-Mère, an inn owned by a friend of former prime minister Jean Chrétien.
The judge said the two BDC executives -- Michel Vennat and Jean Carle, both of them close associates of Mr. Chrétien -- mounted the kind of campaign that would "break" Mr. Beaudoin and "ruin his career."
The pair violated a severance agreement and made unjustified claims that Mr. Beaudoin misappropriated funds, Judge Denis said in a ruling in February.
The judge said the vendetta was mounted with "ferocity, even nastiness." The ruling added: "The whole affair leaves a profound impression of injustice."
Judge Denis said Mr. Beaudoin is a man of exceptional integrity, whose version of events at the bank was more credible than that of other witnesses.
The judge noted that Mr. Vennat gave contradictory testimony and that Mr. Carle, once a senior aide in the Prime Minister's Office, had "no credibility" because of his evasive and false answers.
Mr. Vennat was dumped from his job at BDC by Prime Minister Paul Martin shortly after the ruling. He's suing to try to get his job back.
Mr. Chrétien said he acted as an ordinary MP when he repeatedly lobbied Mr. Beaudoin to issue a loan to the Auberge. Critics charged that he was in a conflict of interest because he had not been paid for his shares he sold in the adjoining golf course.
The BDC, which has existed in one form or another as an instrument of federal government industrial policy for 60 years, provides venture capital and other financial services for small companies. The current value of its assets is $7.8-billion.