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The offices in Montreal of Genivar Inc.

Christinne Muschi/The Globe and Mail

Genivar Inc., one of Quebec's biggest engineering firms, uncovered "inappropriate conduct" after investigating the company's role in financing political parties and bidding on municipal contracts, another sign of corruption in the province's engineering and construction industry.

The disclosure on Monday by Genivar came on the same day that Pierre Duhaime, the former head of engineering giant SNC-Lavalin Group Inc., was formally charged with fraud in a Montreal court.

As revelations of alleged improper behaviour and ethical breaches in the province's public infrastructure sector reach into the high-powered suites of the big engineering and construction firms, observers say the image of Quebec and Canadian business is harmed internationally.

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Montreal-based Genivar said in a statement it is "now in possession of new information which confirms that inappropriate conduct in the province of Quebec in the financing of political parties and the awarding of municipal contracts has in fact occurred in the past. The review process is ongoing and no definitive conclusion can yet be drawn."

The company said an unnamed employee is on leave of absence until a review by a special committee of the board is completed.

Spokeswoman Isabelle Adjahi refused to identify the name of the employee that Genivar alleges acted inappropriately between 2004 and 2009, but confirmed that the company launched its internal investigation after Michel Lalonde, head of the engineering firm Genius Conseil, testified in front of the Charbonneau Commission probe into improper links between political parties and construction companies.

During his testimony last month, Mr. Lalonde said engineering firms colluded to divide municipal contracts among themselves and organized illegal funding drives for political parties. He identified François Perreault, Genivar vice-president for western Quebec, as his interlocutor at Genivar when there were talks to split up the contracts.

Mr. Lalonde also alleged that Genivar gave $200,000 to Union Montréal in 2004, so that Montreal mayor Gérald Tremblay's party could fill its coffers before the 2005 municipal elections.

Mr. Perreault resigned at the beginning of the month as a member of the disciplinary council of the Ordre des ingénieurs du Québec, an appointment made in 2001.

Mr. Perreault could not be reached for comment on Monday; the message on his voice mail says he is on vacation, and the woman who recorded it did not give a return date.

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Meanwhile, Michel Massicotte – the lawyer for former SNC chief executive officer Pierre Duhaime – pleaded not guilty on Mr. Duhaime's behalf in court Monday.

Mr. Duhaime faces charges of fraud, conspiracy to commit fraud and use of forged documents. A second former SNC executive, Riadh Ben Aissa, faces similar charges. The charges are related to an alleged scheme to defraud the McGill University Health Centre in its plans to build a super-hospital in Montreal. None of the allegations have been proven in court.

"People are beginning to hear things about Canada they aren't used to hearing about," says Janet Keeping, head of Transparency International Canada. "It is uncomfortable to have to see this stuff. This is not the way we want Canada to be portrayed in the world," she said.

"That's the bad news. The good news is that these things are coming out and people are being charged. It's a testament to the strength of our system."

Genivar (GNV)

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SNC-Lavalin (SNC)

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