OTTAWA - The Harper government moved to defuse a privacy scandal at Veterans Affairs with an apology Monday to the critic who was the target of a political smear campaign.

But Sean Bruyea, whose medical information was shared widely in the department, insisted that bureaucrats' heads must roll for the extraordinary invasion of his privacy.

The official statement of regret gives hope that a culture of impunity within the department is coming to an end, he said.

"These bureaucrats apparently still believe they've done nothing wrong," Bruyea said after reading the minister's statement.

"They've apparently said they didn't know the law. A culture that is so either negligent of the law or so disrespectful of the law has to be rooted out."

Although the apology was aimed at Bruyea, the former intelligence officer whose medical information was stitched into a ministerial briefing note in March 2006, the veterans affairs minister also acknowledged for the first time that other veterans may have suffered similar privacy invasions.

"I also extend my sincere regrets to anyone who may have gone through the same situation," Jean-Pierre Blackburn said in a release.

The formal statement of regret to Bruyea was accompanied by an offer of fast-tracked mediation for an out-of-court settlement to the Gulf War veteran's $400,000 privacy lawsuit against the federal government.

Bruyea said the scandal over privacy doesn't end with his settlement.

"There has to be consequences and there has to be punishment for these bureaucrats that did something clearly wrong and they knew they were doing wrong."

Bruyea said some settlement of federal cases come with a rider that forbids claimants from speaking publicly. If that is the case, he said, he would reject such a deal because he intends to continue his advocacy work.

Blackburn repeated the apology in the House of Commons. He didn't address the demand that bureaucrats to be fired, but committed to act on whatever the privacy commissioner finds in her investigation.

"We will take action in followup to the results and recommendations," he said. "Meanwhile, I have already taken measures and actions to ensure that veterans privacy is protected."

The department responsible for caring for injured and elderly soldiers has restricted access to its internal data base. Blackburn, in an interview last week, said he'd launched an internal investigation to find out who was responsible for violating Bruyea's privacy, but cautioned the results are expected until December.

Since Bruyea's story broke last month, other veterans have come forward with evidence or concern that their personal information, including medical records, was misused by Veterans Affairs bureaucrats.

The revelations have sent the department reeling and distracted attention away from improvements to veterans benefits by the Conservative government.

Louise Richard, who along with Bruyea criticized federal reforms to veteran services in 2005, uncovered evidence her files had been passed around without her permission.

Veterans ombudsman Pat Stogran, whose term ends next month, said he's been told his files were accessed 400 times. At least three other veterans have contacted lawyers with similar cases and one involves the leak of personal information outside of the federal government.

The apology paves the way for other claims that will inevitably fall on the federal government, a privacy expert said.

"Veterans Affairs was wrong, but this apology makes the burden of proof so much easier," said retired colonel Michel Drapeau. "That will make it easier for the next fellow who comes in the door."

The country's privacy commissioner investigated Bruyea's case and found not only a serious breach, but systemic problems at Veterans Affairs in the handling of personal information.

Bruyea's lawyer, Paul Champ, says the federal government extended the mediation offer within hours of the privacy commissioner's report. Discussions begin next month.

"There is a sacred trust between the government and veterans, and Sean's treatment demonstrates that sometimes that trust can be abused and forgotten by department bureaucrats," said Champ.

"Sean appreciates the government's willingness to take immediate steps to redress the wrong done to him. It sends a good message to the thousands of veterans across the country who have been very disturbed by this case."

Bruyea uncovered evidence that bureaucrats were out to smear him through a Privacy Act request. He received 14,000 pages of information written about him and his opposition to the New Veterans Charter.

Bureaucrats at first tried to woo him because Bruyea was the face of veterans advocacy prior to the appointment of an ombudsman. But the documents show when he started raising questions and pointing out flaws in the reforms, officials turned on him.