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Prime Minister Stephen Harper, right, chats with Dr. Arthur Porter, left, at the Montreal General hospital in Montreal Friday Nov.24, 2006. (Ryan Remiorz/CP)
Prime Minister Stephen Harper, right, chats with Dr. Arthur Porter, left, at the Montreal General hospital in Montreal Friday Nov.24, 2006. (Ryan Remiorz/CP)

Quebec

Ex-Montreal hospital head plotted with ex-SNC execs to defraud government: investigators Add to ...

In the fall of 2008, Arthur Porter stepped into a limousine in Montreal and set off for Rideau Hall. There he was sworn in as a member of the Queen’s Privy Council, a designation that would allow him to sit on the committee that monitors Canada’s spies and how they gather secrets.

But six weeks later, Dr. Porter is alleged to have hatched a conspiracy with two former executives of blue-chip engineering firm SNC-Lavalin Group Inc. to use the largest health-care infrastructure project in Canada to defraud the government of millions of dollars and enrich himself.

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Now he stands at the point of contact where two criminal probes converge at the highest levels of power in Ottawa – the investigation of corruption and cost overruns in Quebec public-sector construction and a foreign bribery probe at SNC-Lavalin.

On Wednesday, Quebec’s special anti-corruption task force laid 13 fraud and corruption-related criminal charges against Dr. Porter – who, during his seven years in Montreal, networked his way into several prominent appointments, including the chairmanship of the civilian committee that oversees the Canadian Security Intelligence Service.

Investigators allege that, as the chief executive of the McGill University Health Centre, Dr. Porter and hospital administrator Yanai Elbaz plotted with former SNC-Lavalin executives Pierre Duhaime and Riadh Ben Aissa to steer the $1.3-billion contract for Montreal’s new hospital complex to SNC.

Central to the alleged scheme, sources close to the investigation say, was a company called Sierra Asset Management, which is incorporated in the Bahamas, where Dr. Porter now resides and runs a private cancer clinic.

Sierra doesn’t have an operational office, nor is anyone publicly identified as an employee, and its official address is the Nassau branch of a Swiss bank, Compagnie Bancaire Helvétique. But on May 1, 2009, in the midst of an intense competition for the contract to build the new hospital complex, SNC-Lavalin signed a consultancy contract with Sierra and eventually transferred $22.5-million to the company.

Bahamian law does not require private companies to list their directors or shareholders publicly, but sources close to the probe say investigators suspect Dr. Porter and Mr. Elbaz are two of the principals behind the company. Nassau businessman Jeremy J. Morris – who was also charged with nine fraud and corruption-related charges on Wednesday – has been listed as the company’s official representative in documents reviewed by investigators, one source said.

Dr. Porter has declined to answer questions from The Globe and Mail about his alleged ties to Sierra Asset Management. On Wednesday, he issued a five-sentence statement denouncing the police, alleging that they did not inform him of the charges before they were laid and that no one in a position of authority in Canada has contacted him about the probe.

“Whilst I am certain there is no basis in fact, I have yet to see any documentation. Since I left Montreal in 2011, I have been subjected to scurrilous and scandalous allegations in the media,” he said.

Since becoming a permanent resident of the Bahamas – where he lives in an affluent gated community in a house called “Petit Bleu” – he has said in several media interviews that he has inoperable lung cancer. But that has not stopped his critics in Quebec. The provincial health ministry accused him in a report of wide-spread financial mismanagement and appointed a special financial overseer to monitor the McGill health centre’s finances. McGill University was recently awarded a default judgment for $252,000 against Dr. Porter after he failed to pay back a low-interest loan.

On Wednesday, that criticism extended to Parliament Hill, where opposition party members demanded to know how and why Prime Minister Stephen Harper twice appointed Dr. Porter – first to serve on the Security Intelligence Review Committee, again in 2010 to chair the committee. (These appointments, which gave Dr. Porter access to any material no matter how classified, were the reason he was sworn in as an officer of the privy council, which permits him, among other things, the right to refer to himself as the Honourable Dr. Arthur Porter.)

When the question was raised in the House of Commons, Public Safety Minister Vic Toews shot back, highlighting the fact that the leaders of the NDP and Liberals at the time consented to the appointments. “The allegations that Dr. Porter is facing have nothing to do with his former responsibilities,” Mr. Toews said.

The idea that the opposition played a role in Dr. Porter’s appointment is “ridiculous,” said Liberal leader Bob Rae, who explained that the parties were given three or four days to review Dr. Porter’s past before responding. Mr. Rae said the government should be forced to explain its rationale because it “has a monopoly on all the facts.”

Dr. Porter’s most vocal supporter from Conservative party circles, former senator David Angus, said he did not want to comment on the charges against Dr. Porter because he knew too little about them. Mr. Angus chaired the board of directors that oversaw Dr. Porter and the network of six hospitals, but said he was flummoxed as to how anyone could have influenced the awarding of the contract given the number of eyes on the deal.

“I don’t know what it’s all about. As long as I was working with Dr. Porter, I thought he was a first-class operator and a very straight shooter, so if that’s not the case, that’s a shame. Let’s follow the rules that apply – the man is innocent until proven guilty.”

Canada has an extradition treaty with the Bahamas, but it is unclear what steps have been taken to have Dr. Porter or Mr. Morris extradited.

SNC-Lavalin, which has recently been accused of paying bribes, or offering bribes, in countries such as Libya, Bangladesh and Algeria in an international crackdown on corruption, issued a brief statement saying that it is co-operating with authorities. Both Mr. Ben Aissa and Mr. Duhaime left SNC in 2012 after forensic auditors enlisted by the company’s board uncovered the payments to Sierra.

Follow us on Twitter: @McarthurGreg, @Perreaux

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