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Quebec corruption probe reaches from hard hats to high-rise offices Add to ...

Quebec Premier Jean Charest will make $75,000 less next year, but he will face the toughest job of his life as he tries to bring his province out of a fog of corruption.

Capping a wild week in which Quebec Liberals, union leaders, police officers and Crown prosecutors all scrambled to deal with a growing crisis of confidence in the province's institutions, the National Assembly adopted a code of ethics that sets strict conflict-of-interest rules and establishes a provincial ethics commissioner.

It also requires Mr. Charest to forfeit a supplemental salary that his party had long provided for him.

But even Mr. Charest's other big gambit of the week – a promise to create a New-York-style anticorruption unit in Quebec – failed to stanch calls for a public inquiry into the long list of shady dealings being reported on a weekly basis in the province. The stakes are high. The Quebec Liberals lost a by-election on Monday in a traditional stronghold, which put Mr. Charest's political future in play.

The problems in Quebec touch a network of and intertwined sectors of the province: labour unions, big business and politics. The main allegations concern undeclared cash: given to government officials in envelopes, laundered through companies, or used in payments to evade millions of dollars in taxes.

“Everything is connected,” a senior police officer involved in one of a number of investigations said this week.

At the centre of the allegations are the province’s construction industry and the union that speaks for almost half of the Quebec’s unionized workers.

The Quebec Federation of Labour responded to the allegations and police probes by adopting a new code of ethics at its annual meeting this week. The provincial government’s ethics commissioner is expected to be named next week. But these actions come late in the game.

Hundreds of investigators and prosecutors are already at work across the province and facing public pressure to produce speedy results. Law-enforcement sources explained this week that the police probes are mainly focused on and around the QFL, the province’s largest trade union. In particular, investigators are looking into the QFL’s construction affiliates, which represent 70 per cent of the workers in the industry.

A police source said that the ongoing operation, dubbed Marteau (Hammer), is investigating QFL members “both past and present.”

But the list of potential targets also goes from hard hats to high-powered businessmen. So far, the provincial Sûreté du Québec and other police forces have executed search warrants in dozens of construction and engineering firms and municipal offices. The former head of QFL-Construction, Jocelyn Dupuis, is facing fraud charges over allegations of false or inflated expense accounts. A few low-level municipal officials have been arrested on suspicion of corruption, and more charges are expected in coming weeks.

The QFL straddles many worlds. During every election campaign, it uses its political clout to favour specific candidates, and has frequently been a key partner in the victories of the Bloc Québécois at the federal level.

It is also a presence in many Quebec boardrooms through its $7-billion investment arm, the Solidarity Fund. Offering 30 per cent tax credits, it attracts millions of dollars every year in investments that are plowed into all sectors of the economy as venture capital. The Solidarity Fund has also been a major investor in some of the biggest construction firms in the province, such as a 20 per cent stake at one time in Simard Beaudry Construction Inc., owned by industry magnate Tony Accurso.

“There is an impression that there has been collusion between construction firms, the work force as represented by the QFL, and the union’s financial arm, the Solidarity Fund,” said Robert Bernier, a professor at the Quebec School of Public Administration. “And when there is collusion, the danger is that it can lead to the creation of consortiums or cartels that act in a monopolistic way, fixing prices and deciding who gets which job.”

QFL president Michel Arsenault, who was a focus of controversy over his travels on Mr. Accurso’s yacht, has said the media’s right-wing agenda is driving attacks against his union.

“They accused people of intimidation and of drug trafficking, they tried to link the Solidary Fund to organized crime. Everything was fair game, but there have been no convictions,” Mr. Arsenault said.

After receiving a new three-year mandate on Friday, Mr. Arsenault vowed to work to ensure that the QFL projects “not just integrity, but also an image of integrity.”

Quebec’s controversies have even started spilling over into the federal arena, as the RCMP probe allegations of unregistered lobbying involving a $9-million renovation contract on Parliament Hill to a Montreal masonry firm. In addition, a number of companies that are owned by Mr. Accurso, including Simard Beaudry, are embroiled in investigations by the RCMP and the Canada Revenue Agency over allegations of fraud and tax evasion. The biggest surprise in these cases is the allegation that officials at the CRA’s offices in Montreal offered inside help to construction firms trying to avoid taxes.

The construction industry is also dealing with revelations that it was infiltrated by criminal groups, including the Mafia and biker gangs.

Normand Marvin (Casper) Ouimet, a full-patch Hells Angels member who faces 22 charges of conspiracy to murder, is also awaiting trial on charges of extortion and money-laundering.

Police say Mr. Ouimet, 41, rose quickly to the top of the drug trade, and needed ways to hide and “clean” his new-found wealth. They say his avenue of choice was the construction industry, especially brick-laying firms. The Sûreté du Québec last year laid 143 charges against Mr. Ouimet, an accountant identified as his girlfriend, a QFL official, a real estate agent and a former vice-president of a major construction crane company.

While Mr. Ouimet is awaiting trial, police and prosecutors in Quebec have been attempting to fend off concerns over the slow pace of the judicial process. The senior prosecutor in charge of the Hammer corruption cases this week complained that the Criminal Code is no longer up to date with today’s corruption.

“The provisions dealing with fraud against the government, with collusion, were written many years ago and don’t always reflect what is going on today,” said Crown prosecutor Sylvain Lépine.

As in all corruption cases, police are also struggling to find more ways around the “general rule of silence” in the construction trade.

“Who is going to squeal?” said a veteran prosecutor with more than a decade of experience in fraud, corruption and organized-crime cases. “The guy who squeals will have his construction site ransacked. It’s very easy to torch a construction site at night.”

Thus the growing calls for a public inquiry, which recently gained new support from both the QFL as well as the province’s main business lobby group, the Conseil du Patronat.

“The benefit of a public inquiry is that people are encouraged to go in and say their piece, with full immunity from prosecution,” Prof. Bernier saiad. “In the case of police investigations, people are jumping in without a net.”

With a report from Rhéal Séguin in Quebec

Julian Sher is a freelance writer

Follow on Twitter: @danlebla

 

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