Péladeau broke ethics code, but no sanctions needed, Quebec watchdog says

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The media mogul turned politician Pierre Karl Péladeau breached the ethics code of Quebec lawmakers but there is no need for sanctions, a watchdog has ruled.

Mr. Péladeau, who was elected last spring as a member of the Quebec National Assembly, broke the legislature's rules when he urged the government to intervene in a business deal involving his family company, Ethics Commissioner Jacques Saint-Laurent concluded in a report tabled Friday.

Mr. Saint-Laurent said however that Mr. Péladeau appeared to have acted in good faith so the matter did not warrant penalties.

National Assembly speaker Jacques Chagnon, who tabled Mr. Saint-Laurent's findings on Friday morning, said that the report's conclusion meant that "as a result, the legislature does not have to make a decision on this report."

The slap on the wrist is good news for Mr. Péladeau, who announced last month that he will seek the leadership of the Parti Québécois. His lack of political experience and extensive business interests had been seen as liabilities to his leadership ambitious.

Mr. Péladeau's family business, Quebecor Inc., was one of two bidders for Vision Globale, a post-production house that also owns Montreal's famous Mel's Cité du Cinéma studios.

Vision Globale was beset by financial problems and was looking at an offer from Clearlake Capital Group, a Los Angeles private investment firm, when Quebecor made a competiting bid.

Mr. Péladeau said he decided to intervene because he thought the studios could relocate in his riding of Saint-Jérôme, in the unused Mirabel airport terminal.

On May 13, Mr. Péladeau made a phone call to the head of Investissement Québec, the province's venture capital fund, which owns a 25-per-cent stake of Vison Globale.

On July 2, during a session of the legislature's committee on the economy, Mr. Péladeau urged Economy Minister Jacques Daoust to intervene to keep Vision Globale under Quebec ownership.

Following his investigation, the ethics commissioner said Mr. Péladeau had broken ethical rules on both occasions.

Mr. Saint-Laurent said the May 13 phone call contravened Section 16 of the code of ethics, which bans MNAs from promoting their personal interests.

The remarks in the legislature committee in July contravened Section 25, which requires lawmakers to recuse themselves from proceedings involving their personal interests.

"In my opinion, the lack of experience of the member from Saint-Jérôme could have played a role in the errors he made on those occasions," Mr. Saint-Laurent said in his report.

He said there would be no sanctions because Mr. Péladeau "appeared to have acted in good faith in his belief of the importance of keeping control of a local company in Quebec hands."

Quebecor subsidiary TVA Group eventually acquired Vision Globale's assets in November for $118-million.

Mr. Péladeau's family business has an extended footprint in Quebec, where it runs two tabloid newspapers, a television network, a news agency and a stable of celebrity magazines.

While he stepped down as Quebecor CEO last year, Mr. Péladeau remains the company's controlling shareholder.

Mr. Saint-Laurent noted in his report that Mr. Péladeau has stated several times that he wants to keep his stake in Quebecor, a company founded by his father.

In addition to the ethics commissioner, the Vision Globale file is also being scrutinized by Quebec's lobbyist commissioner, François Casgrain.

Mr. Casgrain is verifying if representatives from Quebecor acted appropriately when they lobbied Investissement Québec.