A Montreal city councillor friend whom I met at a play this winter tried to minimize the explosive testimony at the Charbonneau inquiry into collusion and corruption in the construction industry in connection with city contracts. “I don’t believe half of what is being said,” the councillor, considered progressive and honest, remarked.
Unfortunately for my friend, if even half of what has been recounted in ongoing hearings is corroborated, it indicates that a culture of corrupt practices has been allowed to grow for more than a decade in the Census Metropolitan Area of Montreal, which covers 3.8 million people, and the good people in government have done nothing to stop it.
This system links construction firms, often with mafia ties, and major engineering offices to illegal practices by elected and high-ranking municipal officials and managers in Montreal, Laval and rapidly growing north-shore exurbs. As of the spring, when hearings were extended into 2015, there was the beginning of evidence that illegal campaign donations by major engineering firms had been made to both provincial Liberal and Parti Québécois campaign coffers.
Corrupt practices involving municipalities included rigged contracts to enable mafia payoffs, brazen cash kickbacks to elected officials and managers, illegal campaign contributions, limiting competition for construction contracts to a favoured few with the right political and/or mafia connections, and threats to discourage competition. This criminal system has developed in a moral and ethical vacuum, as generally well-paid officials participated in or tolerated corrupt practices and whistleblowers have been virtually nonexistent – except for the courageous few who leaked information anonymously to the media.
Among the most egregious examples: Former city of Montreal engineer Gilles Surprenant said he accepted more than $730,000 in kickbacks from a dozen contractors who had submitted inflated bids. Former city of Montreal enginner Luc Leclerc admitted he had accepted more than $500,000 in kickbacks from construction firms, as well as vacations, hockey tickets and home renovations. He also described a golf vacation with the “charming and funny” mafia kingpin Vito Rizzuto. When these revelations are considered in parallel with raids and arrests by the Quebec Provincial Police anticorruption unit and criminal charges laid, what is unfolding is the biggest corruption scandal in Quebec in living memory.
The depressing testimony, and a spate of resignations of elected officials, including mayors Gérald Tremblay of Montreal and Gilles Vaillancourt of Laval – Quebec’s third largest city – and high-ranking managers, appear to justify the 2010 Maclean’s Magazine cover story about Quebec being the most corrupt province.
Tremblay began his testimony by denying that a kickback system was put in place by his party’s former financing chief, Bernard (Mr. Three Per Cent) Trépanier. He admitted firing Trépanier in 2006 when he heard of an attempt to extort $1 million from SmartCentres, Wal-Mart’s real estate division, in connection with expansion plans in Montreal’s Saint-Michel district. Yet two years later, when Tremblay met Trépanier at a party fundraiser boasting he had “filled the hall,” all Tremblay had to say was “Merci!” Tremblay claimed he had asked then–police chief Yvan Delorme to investigate, and that Delorme had refused, saying no crime had been committed. Delorme denies Tremblay’s version.
Even before the Charbonneau hearings started, Frank Zampino, Tremblay’s former right-hand man as Executive Committee Chair, had been charged with fraud, conspiracy and breach of trust as the mastermind of a scheme to favour one company in the awarding of a $300 million contract.
Zampino conceded that in 2006 he was privy to an internal audit report by the city’s comptroller warning of systematic collusion in the awarding of contracts, yet failed to discuss it with Tremblay. He denied that his long personal friendship with construction magnate Tony Accurso, who faces fraud and influence-peddling charges, constituted conflict of interest. Zampino’s association with Accurso included vacationing with him in Las Vegas and spending time on his yacht.
Certainly, in its impact and in the system it has uncovered, this inquiry dwarfs the findings of the 1974 Cliche Commission of inquiry into violence in the construction industry, which boiled down to the use of violence by four affiliates of the Quebec Federation of Labour to monopolize jobs and exclude workers who joined non-QFL unions. Even the sponsorship scandal, in which the federal Liberals siphoned off funds from federal money intended to promote federalism in Quebec after the 1995 referendum, pales in comparison.
The system of corrupt practices laid out in testimony before the Charbonneau Commission includes circumvention by major engineering firms of restrictions on political party donations by corporations and unions. Eight of Quebec’s ten largest engineering firms have been cited for illegal donations.
Early on in the hearings, former construction boss Lino Zambito recalled organizing a fundraising dinner in 2008 featuring then–deputy premier Nathalie Normandeau, which raised $110,000. To get around political contribution caps, he testified that he funnelled donations through third parties to keep the individual donations below the limit of $3,000 then in effect.
From Quebec’s engineering elite, there was more devastating testimony and a spate of resignations. The testimony indicates that both the provincial Liberal Party and the Parti Québécois benefited from illegal donations:
- Yves Cadotte, general vice-president of SNC-Lavalin, Canada’s biggest construction firm, said that the firm illegally donated more than $1 million between 1998 and 2010, divided almost evenly between the Quebec Liberal Party and Parti Québécois. Dozens of employees and some of their spouses agreed to lend their names for party donations to get around the law.
- Rosaire Sauriol, vice-president of Dessau Engineering, who resigned after more than 30 years with the firm, said his company gave more than $1 million to the PQ and Quebec Liberals between 1998 and 2010 and took part in systematic collusion to help organize $2 million in false billings to help finance municipal political parties. He and Zampino are close friends.
- François Perreault, a vice-president of Genivar engineering, resigned from the firm before testifying that he and a colleague gave between $300,000 and $400,000 in cash to Bernard Trépanier so the firm could share in lucrative public-works contracts.
- Pierre Lavallée quit as head of the Quebec City–based engineering firm BPR after he testified about paying a commission to Trépanier.
Certainly, investigative stories in the media, in particular by André Noël in La Presse (he now works for the Charbonneau Commission), Linda Gyulai in the Montreal Gazette, and Alain Gravel and Radio-Canada’s Enquête team, indicated evidence of bid-rigging, massively inflated construction costs and mafia influence and illicit gain. Their reports increased pressure on former Premier Jean Charest to call the inquiry.
The system that appeared to have been in place was not limited to Montreal, so it cannot be explained by the forced merger in 2002 of 27 formerly independent island municipalities into one megacity with 19 boroughs. Four days after Tremblay resigned amid the swirl of corruption testimony, Laval Mayor Gilles Vaillancourt followed suit amid allegations that he took payoffs from construction firms that won big contracts for the city. His home and offices have been raided, but he has not been indicted.
Richard Marcotte, mayor of the rapidly growing north-shore town of Mascouche (population about 43,000) until his resignation in November 2012 and a Liberal organizer, has been charged with corruption and fraud. Sylvie Saint-Jean, former mayor of Boisbriand (population about 27,000), has been charged with fraud.
Alex Norris, a former Gazette investigative reporter and now a Montreal city councillor with Projet Montréal, the only grassroots political party among the city’s three formations, blames the city’s political leaders for wilful blindness. They are beholden to the suppliers and contractors who work for the city and are largely responsible for funding their election campaigns, he argues convincingly.
How about the civil service? Could it be that the advent of a professional and nonpartisan civil service starting with the Quiet Revolution of the 1960s at the provincial level lacked an ethical counterpart at the municipal level? Is corruption a Quebec thing? Is it something genetic? Blame it on the mafia?
Let us remember that in September 2004, Irving Grundman, son of a butcher, former Montreal Canadiens general manager and veteran Saint-Laurent city councillor, pleaded guilty, along with councillor René Dussault, to municipal corruption charges after being caught in a sting in relation to land rezoning. He was sentenced to 23 months of community service and fined $50,000. In the transaction recorded by police videotape, Grundman, who claims he was taking kickbacks for his political party, not himself, said to Dussault, “I’ve done this for quite a few years, okay, and so far so good.”
Construction magnate Guiseppe (Joe) Borsellino said this about about how business is done at city hall in Montreal: “Everything is rigged.”
And where were the whistleblowers, the honest and courageous few? Certainly not among leaders in Tremblay’s party, which merged with and includes former members of the reformist Montreal Citizens’ Movement, or in the entourage of his predecessor Pierre Bourque. According to commission investigator Guy Desrosiers, as far back as 1997 city hall authorities were told of problems in the public works department and ways to correct them. Nothing was ever done and the rot only spread.
Meanwhile, Claude Léger, Montreal’s city manager from 2006 to 2009, testified that Executive Committee chairs Zampino and Claude Dauphin tried to sway municipal selection committees in favour of certain firms bidding for contracts. Léger said he did nothing for fear of losing his job.
Not waiting for an ethical revolution, the PQ government has stepped in to stop what cabinet minister Jean-François Lisée calls “scoundrels, low-lifes and criminals” from doing business with the city. Firms contracted to carry out road and sewer projects costing $100,000 or more will have to be accredited with the Autorité des Marchés Financiers, a monitoring agency. A newly created provincial-municipal advisory board has been given until June to recommend ways to eliminate corruption and collusion.
In response to Québec Solidaire MNA Amir Khadir, the Liberals and PQ say they will wait for the commission’s final report before taking action on his call to repay illegal donations.
Watchdogs aside, the time has come for political leaders in Quebec to face up to this apparent moral and ethical deficit among some lawmakers and too many public servants, as revealed by this latest inquiry and police investigations. If the current crop cannot provide moral leadership, they deserve to be turfed out. It’s happened before.