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MLA Guy Ouellette walks from a government caucus meeting at the legislature in Quebec City on Oct. 25, 2011.Jacques Boissinot/The Canadian Press

The Quebec Liberal government has asked the provincial Auditor-General to probe allegations of collusion between key public anti-corruption institutions and private enterprise in the latest twist in a crisis triggered by the arrest of a Liberal member of the National Assembly.

Public Security Minister Martin Coiteux, the cabinet minister in charge of law enforcement, announced Monday that Auditor-General Guylaine Leclerc will probe allegations that the Unité permanente anticorruption (UPAC) and Quebec's securities watchdog, the Autorité des marchés financiers (AMF), are pushing businesses to pay heavy fees to private consultants to meet regulatory hurdles.

"These revelations, these allegations are very grave, very serious," Mr. Coiteux said. "Confidence in our institutions is very important and it is being tested."

The allegations published Monday morning came from Annie Trudel, a former Transport Quebec auditor and whistle-blower who helped expose Quebec corruption in the past decade, and MNA Guy Ouellette.

Read also: Shock, confusion as Guy Ouellette steps away from Quebec Liberals after arrest

Mr. Ouellette was arrested last week amid allegations he helped leak material about police investigations to the media. He has not been charged with any crime but was forced to leave the Liberal caucus and resign from his post as chair of a UPAC oversight committee. He denies the allegations, saying he's being framed by UPAC, and the main goal is to intimidate him and any other MNAs who might challenge the power of UPAC head Robert Lafrenière.

Since 2013, companies bidding on government contracts in Quebec are required to get a corruption-free stamp of approval from the AMF after an investigation led by UPAC.

Ms. Trudel told Le Journal de Montréal that Mr. Ouellette has been investigating suspicions UPAC and the AMF are pushing businesses that fail to meet the AMF's standards toward outside consulting firms for advice – often at a cost of hundreds of thousands of dollars. Ms. Trudel described the system as "collusion."

The AMF issued a statement Monday denying any collusion. "These allegations are not only false and totally gratuitous, but they stain the reputation and integrity of all the Autorité's personnel," the statement said.

The AMF says it does not refer firms to private consultants but provides them instructions for remedial measures to gain approval. The decision to get outside help from consultants is up to the company, the AMF said.

Mr. Coiteux also promised a new process to make UPAC more accountable before new legislation is passed in coming months to make it more independent. He did not go into specifics.

Meanwhile, Mr. Ouellette said he thinks UPAC is trying to muzzle him and he promised to take his seat in the National Assembly this week to shed light on all that has happened.

Mr. Ouellette walked into a Quebec radio station Friday to give his version of events. An interview was recorded and aired Monday in case, he said, police lock him up before he gets a chance to speak to the National Assembly, using his legislative immunity to outline allegations of wrongdoing at UPAC.

"These events lead me to think UPAC will do anything to muzzle me, to muzzle a parliamentarian, so I can't give my version of all the acts of intimidation that unit is undertaking," Mr. Ouellette told radio station 98.5.

Members of the National Assembly from all parties continued this week to back Mr. Ouellette, a 10-year MNA who is respected for his integrity, and urged him to clarify matters as quickly as possible. They demanded the same of UPAC.

Quebec media also reported Ms. Trudel and Mr. Ouellette are a couple but she denied it Monday telling Radio-Canada they have an unspecified personal relationship and are professional allies.

UPAC and Mr. Lafrenière have declined to comment since Mr. Ouellette's arrest.

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