A Montreal firm landed a federal stimulus contract while a top Tory organizer and senator was on the payroll, The Canadian Press has learned.
Senator Leo Housakos's employer, BPR Inc., was part of a consortium that won a $1.4-million engineering contract to study the future of Montreal's aging Champlain Bridge.
Public Works Minister Christian Paradis announced $212-million in funding for the bridge - and a competition for the engineering contract - on May 20, the same day Mr. Housakos was stage-managing a major Conservative fundraiser in Montreal.
The Canadian Press obtained a copy of the guest list for one of the special VIP receptions that was held just before the main fundraising event.
The 48-person list included four senior executives from BPR and the winning consortium, BCDE.
BPR president Pierre Lavallee is registered as having donated $250 to the Conservative party eight days after the event.
Also on the guest list for the special reception were two officials from the federal authority that runs the bridge, Paul Kefalas and Serge Martel. Mr. Kefalas had formerly worked at Swiss multinational ABB, and had given work to a small consulting company Mr. Housakos co-founded.
Four months after the reception and fundraiser, Jacques Cartier and Champlain Bridge Inc. (JCCBI) awarded the $1.4-million contract to BPR and the consortium.
Mr. Housakos said in an interview he was never an employee of BPR proper, but rather of its wholly-owned subsidiary TerrEau, and never made any representations to government officials about BPR business.
"I never made any representations to any minister, any bureaucrat, to anyone in government on behalf of BPR at any time," Mr. Housakos said.
Senate Ethics Officer Jean Fournier, speaking in general about the Senate Conflict of Interest Code, said he advises senators not to have any contact with federal officials or federal ministers relating to contracts. He also asks senators to clear any matters relating to federal contracts with his office.
Mr. Housakos said he couldn't have advised Mr. Fournier that BPR was bidding on the Champlain Bridge contract because he didn't know about it. He said he told Mr. Fournier all about the nature of his employment at TerrEau and was told there were no problems.
Still, the exact nature of Mr. Housakos' employment at BPR is unclear.
Mr. Housakos says he was hired by BPR to be vice-president of business development one week before he was appointed to the Senate by Prime Minister Stephen Harper last December. After the appointment, he said, he was transferred to their "start-up" subsidiary TerrEau and began work on Jan. 5, 2009.
Mr. Housakos' declaration to the Senate ethics commissioner on Feb. 4, 2009, however, states that he is a "member of the board of directors of BPR Engineering, Inc.," and president and member of the board of TerrEau.
He sent another declaration to the Senate ethics office last week, saying he had resigned from both positions effective Oct. 1, 2009 - 10 days after BPR had won the contract.
Throughout the year, his Senate website stated that he was vice-president of business development at BPR and president of TerrEau, until it was changed midday last Thursday.
Mr. Housakos calls that a discrepancy that he only noticed last week.
When asked about his employment, BPR's spokeswoman Kathia Brien said Mr. Housakos was president of TerrEau, and that the information on his website was "out of our control."
Ms. Brien said Mr. Housakos never worked on the Champlain Bridge bid, and to the company's knowledge did not speak to federal officials on its behalf.
Mr. Housakos' office with TerrEau was located in BPR's building in downtown Montreal. TerrEau is based in Quebec City.
Liberal ethics critic Marlene Jennings said there appear to be violations of the Senate Code of Ethics that deal with senators working with companies that have business arrangements with the federal government.
"I'd like to see the Senate commissioner investigate this entire thing," said Ms. Jennings.
"I think the minister for government ethics and democratic reform should look at the possibility at having the whole bidding process carefully examined to ensure that the companies that were bidding weren't trying to influence by making political donations."
Mr. Housakos is one of Mr. Harper's top advisers and organizers in Quebec, a former fundraiser with the Action Democratique du Quebec (ADQ) and close friend of Mr. Harper's senior aide Dimitri Soudas.
He also sits on the Senate transport committee, which would oversee any legislation that deals with federal bridges.
Mr. Housakos has a degree in political science from McGill University, and worked previously in sales for a chemical company and as president and co-founder of consulting firm Quadvision.
He was also an adviser to Montreal Mayor Gerald Tremblay, and spent a year on Via Rail's board, appointed by the Conservatives in 2007.
The replacement or renovation of the Champlain Bridge has been a heavily politicized issue in Quebec. The Conservatives were bashed late last year for not coming up with funding to deal with the aging infrastructure.
Then, on the same day as the VIP reception in Montreal at the fundraiser, Mr. Paradis reiterated the government's budget plan to spend $212-million on the aging structure as part of the budget stimulus package. He also signalled that the government would be taking bids on an engineering study.
Mr. Paradis' department was not in charge of the call for tenders, but rather the JCCBI, which falls under the wing of the Federal Bridge Corp. Ltd. and Transport Canada.
A spokesman for the Federal Bridge Corp. Ltd. and JCCBI, Andre Girard, said the bidding process for the study was like "Teflon" and "absolutely transparent," with a team of engineers and outside observers participating. Board members immediately approved the team's choice for the contract, he added.
Mr. Girard confirmed that the two executives from JCCBI, Mr. Martel and Mr. Kefalas, did attend the Conservative fundraiser, but said they did not receive a written or verbal invitation and did not go into any private cocktail beforehand. He said the JCCBI has a code of ethics, but would not make one available to The Canadian Press.
The guest list of the Conservative cocktail party featured executives from nearly all the major firms that would bid on the study just weeks later, with the winning consortium the best represented with five executives.
"I wonder about the propriety of heads and executives of federal agencies ... either giving political donations to political parties, and-or attending fundraisers as the guest of someone else," said Ms. Jennings.
Several Conservatives who were at the May event said Mr. Housakos was instrumental in its organization, down to who was on the guest lists for the VIP cocktails before the main event. Mr. Housakos says that's not so.
"He was the quarterback on it," said one Montreal Conservative. "He was the one who personally decided who was going to be in those rooms."
"This was a Housakos production from A to Z," said another Tory.
Another guest at the cocktail with Mr. Paradis, photographer Yves Ranger, said Mr. Housakos was one of the organizers of that particular mixer.
Mr. Housakos vehemently denies this, and said he didn't even bump into his BPR colleagues that evening.
"I didn't organize that guest list," he said.
He also rejected any suggestion that the guest list of 48 was skewed by including 13 executives from Montreal engineering firms and two from the bridge agency.
"What can I tell you? They don't have a right to come to a fundraiser? They don't have a right to come and meet a minister? They don't have a right to bid on federal government contracts?" Mr. Housakos said.
Other guests on the list included friends and former work and political associates of Mr. Housakos, such as would-be ADQ leadership contestant Myriam Taschereau and soon-to-be-named senator Claude Carignan, another adequiste.
BPR is also part of a major controversy in Montreal over a $618-million water-meter plan. BPR was awarded a $7.4-million contract to manage the bidding process for the plan, but that cost ballooned to more than $14-million.
The city's auditor general found BPR did not deliver on key elements of the contract, and that it was awarded extra duties that should have been opened to other companies for bidding. He also found the entire bidding process for the main water-meter contract flawed.
Both BPR and Mr. Housakos said that the senator had no involvement in the water-meter contract.