Quebec enveloped in swirl of corruption allegations

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The resignation of Montreal Mayor Michael Applebaum was just one of three separate local news developments related to allegations of corruption in Quebec, underlining the head-spinning mood in Canada's second-largest city.

While Mr. Applebaum was dealing with the fallout of his arrest earlier this week on 14 criminal counts, Claude Asselin, an engineering executive named as a co-conspirator in the charges against the mayor, has been testifying at the Charbonneau inquiry on a separate matter, about the way public contracts were awarded by the mayor in the neighbouring city of Laval.

At the same time, the federal Competition Bureau was probing another type of alleged wrongdoings: collusion among companies that sell highway light poles.

The Bureau investigates are price-fixing and bid-rigging as part of its anti-competitive activities.

Armed with search warrants from the Quebec Superior Court, investigators from the Competition Bureau seized documents and questioned people at two companies that sell highway light poles, lighting towers, signs and other such products.

"We are investigating with respect to the sale of street lighting and highway traffic signs," said Bureau spokeswoman Gabrielle Tassé.

Possible collusion and price-fixing among street-lighting and signage companies was mentioned in an explosive report by anti-corruption crusader and former Montreal police chief Jacques Duchesneau. It was tabled in the National Assembly in 2011 and described in detail an elaborate network of influence peddling and collusion in the awarding of contracts for a provincial network of about 60,000 lights and 2,000 tall lighting tower.

"We are just gathering evidence at this point. There has been no conclusion of wrongdoing," Ms. Tassé said.

The inquiry into corruption in Quebec's construction industry headed by Justice France Charbonneau has so far been focused on the awarding of municipal contracts. It will look closely into provincial government contracts at a later date.

The witness now testifying before Justice Charbonneau is Mr. Asselin, who was Laval's general-manager between 1988 and 2006 before joining the engineering firm Dessau.

On Monday, when Mr. Applebaum and two others were taken into custody by UPAC, Quebec's special anti-corruption squad, the arrest warrants alleged the mayor had been part of a conspiracy between 2009 and 2011, with three men who were Dessau executives at the time, Mr. Asselin, Rosaire Sauriol and Patrice Laporte.

Mr. Laporte, the only one of the three still employed at Dessau, has been suspended, company spokeswoman Jessie-Kim Malo said.

Mr. Sauriol resigned from Dessau last March after he appeared at the Charbonneau inquiry and testified that the firm found by his father had colluded with other company to split up infrastructure contracts in Montreal and used false invoices to illegally fund political parties.

The inquiry is now hearing from Mr. Asselin, who had been accused of fraud alongside former Laval mayor Gilles Vaillancourt in early May.

In his testimony, Mr. Asselin said it wasn't the executive committee but Mr. Vaillancourt who decided which firms would get what share of the public contracts. "It was his decision, madame. It was his pick."

Mr. Asselin was asked how outsiders could compete under such circumstances. "Anyone has the right to submit a bid," he said.

Inquiry counsel Paul Crépeau asked how this would work if Mr. Vaillancourt personally picked the contract winners, Mr. Asselin smiled and said, "Well, it's not all the contracts."