Latest arrests in Quebec corruption scandal have deep-rooted origins

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The origins of the biggest bombshell yet in Quebec's unending corruption scandal reach back to a deadly tainted-water outbreak in the small Ontario town of Walkerton.

The arrests this week of powerful onetime deputy premier Nathalie Normandeau and former cabinet minister and long-time Liberal money man Marc-Yvan Côté on charges of corruption, bribery, fraud and conspiracy have rattled the political order in the province.

Ms. Normandeau, 47, was the right hand of former premier Jean Charest, and Mr. Côté a key Liberal fundraiser over decades. But the allegations spanning 2000 to 2012 actually stem from Ms. Normandeau's time in charge of financing the construction of the province's water and sewage systems as municipal affairs minister and Mr. Côté's life as an executive at an engineering firm that built many of those projects.

In the mid-2000s, Mr. Charest had dedicated billions of dollars for new infrastructure, and officials in municipal affairs had to figure out how to spend some of it. They looked back at the Walkerton E. coli outbreak in 2000 that killed seven people and sickened hundreds and worried about how easily it could happen in Quebec.

"At the time, we didn't treat sewage in Quebec. You'll recall the Walkerton episode. After that, there were new requirements to treat water and sewage, and there was now aid for municipalities to get equipped accordingly," Yvan Dumont, an engineer at municipal affairs, testified in 2014 at the Charbonneau corruption inquiry.

Municipal applications for money, often crafted by private engineering firms, poured into the department in 2007, where officials such as Mr. Dumont graded them according to urgency. They were also tasked to find "the best solution for the best price" the engineer recalled, which didn't always coincide with the grandiose plans of municipal leaders or engineering firms.

The files went on to the minister's office where "political criteria" were applied, according to the report completed last year by Justice France Charbonneau. About 75 per cent of the projects were so urgent they escaped political influence. For the other quarter, projects in Liberal ridings were much more likely to go ahead, she found. The law allowed the minister of municipal affairs to use her discretion to boost funding if she believed the municipality couldn't afford a project and to outright approve others that didn't fit technical criteria. She used those powers 32 times.

Two senior bureaucrats testified they started to bristle under the influence, and in 2009 they asked her in diplomatic terms to butt out. She was soon shuffled out anyway.

One of Ms. Normandeau's closest political friends was Mr. Côté, who worked to drum up business for the Roche engineering firm from 2005 to 2009 – about the same time frame during which Ms. Normandeau was in charge of municipal affairs. Both hailed from eastern Quebec.

Justice Charbonneau wrote that Roche clearly benefited from favouritism and, in return, Mr. Côté delivered $40,000 a year in donations to Ms. Normandeau over a five-year span, often funnelling illegal corporate donations through company personnel and their family members.

Mr. Côté, 68, had been involved in a similar political scandal before, the federal sponsorship program that was eventually scrutinized by Justice John Gomery's public inquiry. The Gomery commission heard of a similar pattern, where well-connected advertising companies made unreported or disguised donations to the federal Liberals in return for sponsorship contracts.

Mr. Côté, who was the federal Liberals' top organizer for eastern Quebec in 1997, told the Gomery inquiry that he received "a well-padded envelope" full of $100 bills from a party executive and redistributed $60,000 in cash to several party candidates.

Mr. Côté was later in a group of 10 people who were banned from the federal party because of their involvement in the sponsorship scandal.

He remained firmly in the provincial Liberal fold, however. An $11-million subsidy for the water-treatment plant in Boisbriand, a bedroom community of Quebec, was a template for a system that operated on projects across the province.

Mr. Côté and the construction company owner, Lino Zambito, lobbied Ms. Normandeau and her staffers for their project. Court documents show Ms. Normandeau ignored repeated unfavorable advice from experts to award the $11-million. Roche officials and Mr. Zambito organized frequent fundraising activities for the Liberals, often skirting rules against corporate donations.

Mr. Zambito, meanwhile, ran his own personal charm campaign, sending Ms. Normandeau 40 roses on her 40th birthday, and giving concert tickets to exclusive box seats for Madonna and Celine Dion for her and friends. "It was exceptional," Ms. Normandeau explained afterward. "I mean, it's Celine Dion."

Ms. Normandeau has denied any wrongdoing through her lawyer, and none of the allegations has been proven in court. She and the six other accused will appear in court April 20.