The RCMP is investigating a $9-million renovation contract on Parliament Hill to a Montreal-based construction firm that hired a Conservative supporter to help in its dealings with the federal government, sources said.
The RCMP is probing the nature of the relationship between construction firm LM Sauvé and long-time Conservative organizer and business adviser Gilles Varin. Investigators are focusing on lobbying rules and anti-corruption laws.
According to internal LM Sauvé documents obtained by The Globe and Mail and Radio-Canada, LM Sauvé paid $140,000 to Mr. Varin between 2007 and 2009, with the first payment coming one day after Public Works Canada launched a tendering process for the restoration of the West Block.
In an interview, LM Sauvé president Paul Sauvé said he hired Mr. Varin after deciding to bid on the contract, which was to renovate the 19th-century building that houses MPs, committee rooms and a cafeteria. Mr. Sauvé said he relished the thought of getting a foothold in Ottawa, given that the $9-million contract was part of a massive $5-billion, 25-year renovation project on Parliament Hill.
Things went well at first. LM Sauvé made Public Works' shortlist in early 2008, and beat out four other companies to win the contract later that year.
"[Mr. Varin]told us that he had close friends who worked in the system at Public Works Canada, within the decisional process," Mr. Sauvé said. "The deal was that if we made the short list, we would pay. That's what we did."
Mr. Varin did not register as a lobbyist on the file. Asked in an interview to explain his role with LM Sauvé, Mr. Varin said he received monthly retainers during the tendering process and after the contract was awarded. He added the only thing he did on the Parliament contract was forward Mr. Sauvé's CV to a civil servant at Public Works, and that he actually got a friend to do it.
However, a Conservative insider said Mr. Varin solicited the help of at least one of the Conservative officials he met during his decades in partisan politics in the Montreal area. In an interview, a staffer in the office of Conservative senator Pierre-Claude Nolin said Mr. Varin sought his advice on the LM Sauvé contract.
"Gilles [Varin]told me he had that file," said the staffer, Hubert Pichet, a former Conservative candidate and a member of the Prime Minister's Office in the government of Brian Mulroney in the 1980s. "He asked me if I knew anyone in the office of [then-public works minister Michael Fortier]who could help him."
Mr. Pichet added he had an "impromptu" meeting with Mr. Sauvé and Mr. Varin at a restaurant in Montreal, the Mas des Oliviers, where the contract was discussed.
Former Conservative official Bernard Côté said he also dined at the Mas des Oliviers with Mr. Sauvé during the tendering process, and that the Parliament Hill project was discussed. At the time, Mr. Côté worked in the Montreal office of the minister of Public Works. He said he did not help LM Sauvé.
"It wasn't something that was part of my area of responsibility," Mr. Côté said, adding that he did not remember who asked him to meet with Mr. Sauvé.
Mr. Varin stopped working with LM Sauvé when the company filed for bankruptcy in the spring of 2009. The company lost its West Block contract at the time, when Public Works found the company failed to accomplish required tasks on the building.
In the interview, Mr. Varin said he did not communicate with Conservative ministers or senior civil servants in relation to the contract, therefore he did not register as a lobbyist.
The Harper government also banned success fees to lobbyists as part of changes to the Lobbying Act that took effect in July, 2008.
Mr. Varin said he received no such payment from LM Sauvé, saying his retainers were in the range of $3,000 to $5,000 a month. He could not provide an explanation for seven additional monthly payments of $10,000 each (plus tax) that he started receiving in September, 2008, according to internal LM Sauvé accounting documents.
"No, there was no bonus paid upon contract award," Mr. Varin said, adding that he also advised LM Sauvé on potential work in the private sector.
However, when Mr. Varin laid out details of his business dealings in an interview with the Quebec provincial police last year, he explained that he generally sought bonuses when he helped his clients in various sectors of the economy to obtain contracts.
"I advise companies and individuals by telling them what they need to do to develop their business, and I represent them through my network to help them obtain contracts," Mr. Varin said, according to a transcript of the police interview. "My remuneration is a monthly payment and a bonus upon the awarding of a contract."
Mr. Sauvé has a checkered past, having acknowledged collaborating with senior Hells Angels on a contract to renovate St. James church in Montreal in 2006. As he faced a financial crunch, Mr. Sauvé said the bikers took over the accounting of his company and paid workers in cash.
Mr. Sauvé said he does not know exactly what steps Mr. Varin undertook on his behalf, but he was told by Mr. Varin that he acted quietly.
"Gilles Varin's favourite expression is that he walks with felt boots," Mr. Sauvé said.