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Former Laval mayor Gilles Vaillancourt scrums with reporters outside a courtroom in Laval, Que. on Thursday May 9, 2013. The ex-mayor who once seemed unbeatable now faces one of the Criminal Code's most serious charges: directing a criminal organization.

Andy Blatchford/The Canadian Press

The mayor of Quebec's third-largest city has taken the extraordinary step of asking the province to put Laval under trusteeship over allegations that he and several councillors participated in illegal funding schemes.

Alexandre Duplessis, the interim mayor who took over from Gilles Vaillancourt after he resigned amid a corruption scandal, made the request Friday afternoon – one day after allegations surfaced at the Charbonneau inquiry that the new mayor helped launder illegal campaign donations.

Minister of Municipal Affairs Sylvain Gaudreault said the situation had become untenable and he held several telephone conversations with Mr. Duplessis on Friday, urging him to place the city under trusteeship. The mayor finally agreed.

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"Together we agreed that Mr. Duplessis should request that the city be placed under trusteeship," Mr. Gaudreault said in an interview. "This is a major decision that involves Quebec's third-largest city. This is no small matter."

The move, usually reserved for small municipalities that are bankrupt or can no longer muster quorum at town council, will see the province's municipal commission name an administrator to run the city of more than 400,000 residents. "Given the size of the city it may even involve a team of administrators," the minister said, noting that nothing like this has ever happened in modern Quebec history.

Each decision made by the municipal council will need to be validated by the commission, which may even extend the trusteeship past the Nov. 3, 2013, municipal election, Mr. Gaudreault added.

"In this extraordinary context, it's in the interest to find a transitional solution that will guarantee services to citizens," Mr. Duplessis said, adding that he will stay on as mayor until the election.

Mr. Duplessis also announced he has decided he will no longer seek election in the fall. "I'm realistic," Mr. Duplessis said. "But I refute the allegations made against me at the last session of the Charbonneau inquiry."

Quebec's corruption inquiry heard Thursday from a long-time official in Mr. Duplessis's party who testified that Mr. Duplessis, along with almost every other city councillor in the 1990s and 2000s, helped funnel cash kickbacks from engineering firms into the coffers of the PRO des Lavallois party.

Jean Bertrand, the official agent for the party, said councillors or their family members would accept cash from the companies and then make political donations to disguise the money's origins. Corporate donations are illegal in Quebec.

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Mr. Bertrand, who is facing criminal charges for fraud and corruption, said as much as $60,000 a year in donations was disguised from 1995 to 2010.

He could only list three councillors who did not take part in the scheme over 15 years. Laval city council seats 21 representatives in addition to the mayor.

And that was just one scheme. Other witnesses have described more direct bribes and kickbacks that went to officials, particularly Mr. Vaillancourt and his entourage.

Robert Bordeleau, the leader of Laval's unelected opposition, has long called for the resignation of the entire council, or trusteeship as an alternative.

"These people had no legitimacy," Mr. Bordeleau said, pointing out the city is without a manager or deputy after they were forced to step down this spring as the inquiry peeled back the many layers of scandal.

Mr. Duplessis was named mayor by his fellow councillors on Nov. 23, 2012. He launched a legal action last week to try to adjourn the Charbonneau commission. Earlier this month, the mayor's office was raided – now a monthly occurrence at Laval City Hall.

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Mr. Vaillancourt, who resigned last fall after 23 years as mayor and is facing criminal prosecution for a host of other kickback, bribery and illegal financing schemes, but did not take part in this one, Mr. Bertrand said.

Thirty-seven people, including Mr. Vaillancourt, face criminal charges related to Laval corruption.

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