WAR ON DRUGS, LUMBER FIGHT COST US MILLIONS

Ottawa Paid $55.4 Million To Private Law Firms In 2004 With Key
Battles Dominating The Bill

OTTAWA -- A civil suit to recover the millions sucked down the drain
in the Quebec sponsorship program was among the costs that drove
Ottawa's private legal tab last year to more than $55 million,
internal government records disclose.

Canada-U.S. trade disputes, an epic aboriginal legal battle in
Alberta and "the war on drugs" were also among big ticket items
billed by private lawyers.

The 430 private law firms who represent the Government of Canada in
litigation by and against the federal Crown billed $55.4 million for
legal work performed during the latest fiscal year ending March 31,
Department of Justice said in documents obtained under the federal
Access to Information Act.

Taxpayers' tab for private legal help in 2004-2005 slightly exceeds
the $54.5 million bill the federal government shelled out in
2003-2004, but it still represents a steep decline from the record
set four years ago when Ottawa forked over more than $63 million to
Canadian and American law firms.

Last year almost $21.8 million was spent to prosecute criminal and
federal regulatory offences, while $15.5 million was spent on civil
matters. Nearly $6 million was spent on aboriginal-related
litigation, including defending the Crown against land claims.

While it was far from the biggest expense, Quebec law firm Cain,
Lamarre, Casgrain, Wells billed more than $1.3 million to lay the
groundwork for a lawsuit launched by Ottawa last March over the
sponsorship scandal.

The suit seeks to recover $54 million in damages from 11 ad agencies
and eight individuals for alleged over-billing during the
government's scandal-plagued sponsorship program from 1997 to 2000.

The suit is on temporary hold pending the release of the Gomery
commission's report next November.

"But if the case goes to trial, it's going to be a long trial,"
predicted Montreal lawyer Andre Gauthier who crafted the suit for the
Department of Public Works.

In 2004-2005, for the fourth year in a row, blue-chip Washington,
D.C. attorneys Weil Gotshal & Manges billed more than any other law
firm: nearly $5.9 million for a 15-member legal team that defends
Canada's $10.5 billion annual exports of softwood lumber against
American protectionism.

As a group, U.S. attorneys will bill Ottawa close to $7 million in
2004-2005, mostly for representing Canadian interests in high-stakes
trade disputes with the U.S.

"Most trade between the U.S. and Canada is very peaceful but there
are a few friction areas which get all of the attention," remarked
veteran Washington, D.C. litigator Catherine Curtiss, who sees no end in sight.

Last year she and her firm, Hughes Hubbard and Reed, billed almost $1
million for defending western hard red spring wheat and live swine.

A venerable Calgary firm, Macleod Dixon, was the top-billing Canadian
law firm for 2004-2005, charging $4 million for defending the federal
Crown in a complex $1.3-billion-plus dispute with some Alberta Indian
bands, who allege the government mismanaged their oil revenues for decades.

As usual, the single biggest-ticket item on Ottawa's legal tab was
the unending "war on drugs," which the Justice Department projects
will cost $18.4 million in 2004-2005.

Bills are submitted by 250 law firms across Canada appointed as
standing Crown agents. The bulk of the billings come from British
Columbia, home of gargantuan marijuana grow-ops. Six law firms
amongst the 20 top-billing private federal prosecutors hail from
B.C., billing a total of $4.8 million.